Covid-19: Local Authority Revenue

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

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Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

What recent assessment he has made of the reduction in local authority revenue as a result of the covid-19 outbreak.

Photo of Rachel Hopkins Rachel Hopkins Labour, Luton South

What recent estimate he has made of the reduction in local authority revenue as a result of the covid-19 outbreak.

Photo of Jeff Smith Jeff Smith Opposition Whip (Commons)

What recent estimate he has made of the reduction in local authority revenue as a result of the covid-19 outbreak.

Photo of Christopher Pincher Christopher Pincher Minister of State (Housing, Communities and Local Government)

I apologise for the absence of the Minister of State, Ministry of Housing, Communities and Local Government, my hon. Friend Mr Clarke—I am a small but no less perfectly formed substitute, I hope.

We are working closely with the sector to develop a good understanding of the pressures that local authorities are currently facing. We have announced £3.2 billion of additional funding and measures to support immediate cash-flow concerns. This is a very significant package of support, which responds to the range of pressures that councils have told us they are facing.

Photo of Yvonne Fovargue Yvonne Fovargue Labour, Makerfield

Wigan Council estimates that it will lose £40 million in income this year, while spending on frontline services has absolutely rocketed because of the coronavirus crisis. In addition, the loss of the dividend from Manchester airport will exacerbate that pressure—[Inaudible.]

Photo of Christopher Pincher Christopher Pincher Minister of State (Housing, Communities and Local Government)

I think I got the gist of the hon. Lady’s question. Wigan Council has received £10.5 million of the original £1.6 billion that has been allocated to local authorities, and that funding is unringfenced so they can use it as they see fit. As the House will know, local authorities will be fully compensated for the business rates loss that they have incurred, and we will work with councils over the coming weeks to understand what their particular needs are.

Photo of Rachel Hopkins Rachel Hopkins Labour, Luton South

Yesterday the Local Government Association and CIPFA told the Housing, Communities and Local Government Committee that the Government must support councils who have lost commercial revenue streams because of the coronavirus crisis. Luton Council relies on commercial income gained through its ownership of London Luton airport. This income has dried up overnight. The Government promised to do whatever is necessary to financially support councils, so when will they be introducing funding for councils that have lost considerable commercial income to avoid those councils being forced to cut vital frontline services?

Photo of Christopher Pincher Christopher Pincher Minister of State (Housing, Communities and Local Government)

I am obliged to the hon. Lady for her question. In addition to the announcements I have just made, I can tell her that Luton Council has received £5.4 million of funding from that very significant package that we have put together. We have also deferred £2.6 billion in payments to central Government and we will work with local authorities to understand their particular needs. I point out that the County Councils Network, the Local Government Association and the LGA’s Community Wellbeing Board have all welcomed the Government’s interventions.

Photo of Jeff Smith Jeff Smith Opposition Whip (Commons)

I suspect that the Minister is going to tell me how much Manchester has been given, which is about 12% of what is actually needed. In Manchester, the council is forecasting £125 million in lost income this financial year as a result of coronavirus. That is the money that has kept services going in the face of some of the harshest cuts in the public sector and is allowing the council to lead the response to covid-19. Will the Minister pledge to fully reimburse councils for lost income, so that they can have the certainty they need to carry on their vital work on the frontline?

Photo of Christopher Pincher Christopher Pincher Minister of State (Housing, Communities and Local Government)

I congratulate all local authorities on the hard work that they are undertaking at this critical time. The hon. Gentleman is right: I am going to tell him that his authority has received £18.6 million in the first tranche of funds made available to local authorities, and more will come. In addition to what I have already said, let me reiterate that we are going to work with local authorities to ensure that they get the help they need to see them through this crisis. We have made that commitment—the Chancellor has made that commitment and I reiterate it here at the Dispatch Box.