Covid-19: Local Authority Funding

Housing, Communities and Local Government – in the House of Commons on 28th April 2020.

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Photo of Toby Perkins Toby Perkins Shadow Minister (Education)

What plans the Government have to provide additional funding to local authorities to replace funds spent on the response to the covid-19 outbreak.

Photo of Robert Jenrick Robert Jenrick The Secretary of State for Housing, Communities and Local Government

At the start of this emergency, I said that we would give councils the resources they need to do the job, and I meant it. We have announced over £3.2 billion of new funding to councils. This is in addition to £20 billion in business rate support and cashflow grant funding; £12 billion in grants for businesses delivered through councils, which have got £6 billion of that out of the door as of last week; £2.6 billion in deferred business rate payments; and £500 million in council tax funds. We will back councils with the financial resources they need as we work together in this national endeavour against coronavirus.

Photo of Toby Perkins Toby Perkins Shadow Minister (Education)

The Secretary of State told councils to spend what it takes and expect reimbursement—[Inaudible.] From the money that the Secretary of State announced, they received just £59,000 of his initial £1.6 billion—[Inaudible.]

Photo of Robert Jenrick Robert Jenrick The Secretary of State for Housing, Communities and Local Government

Apologies to the hon. Gentleman for the fact that we did not hear all his question, but I think I understand the point that he was making, which was twofold. First, whether the Government will stand behind local councils for all the covid-related expenditure, to which the answer is absolutely yes. Those things that we asked of local councils in our national response, we will ensure that they get the resources that they need to do.

Secondly, will we ensure that smaller councils, such as district councils, get a fair share of that money to reflect the important work that they are also doing, for example, on rough sleeping? Yes, absolutely; and am I aware that those councils are concerned about loss of income and need to be given assurances that they can be on a stable and sustainable financial footing? Yes, of course I understand that, and we will take action accordingly.

Photo of Steve Reed Steve Reed Shadow Secretary of State for Communities and Local Government

May I first echo the Secretary of State’s thanks to everybody working in local government? They are all heroes helping to keep our communities safe. As he is aware, councils are not allowed to go into debt, so if the Government do not keep their promise to fund the full cost of the crisis, councils will be forced to make cuts potentially totalling billions of pounds, which will mean job losses.

Councils say that the additional funding announced so far covers barely a quarter of what is needed; it is not enough. Will he reconfirm the Government’s original promise to fund whatever is necessary in full? If he does not, the frontline heroes we are cheering today will lose their jobs tomorrow.

Photo of Robert Jenrick Robert Jenrick The Secretary of State for Housing, Communities and Local Government

I have been working closely with local councils across the country on a cross-party basis and speaking to them almost every day. The message that I have consistently delivered is that we will fund the brilliant work that they are doing to support the country through the crisis. We have seen that already with the £3.2 billion of additional funding that I announced, plus the other support mechanisms. We will keep under review whether further funding is required, and if it is, we will bring it forward, because we want to back this brilliant sector in all that it is doing.