Local Government Finance: Coronavirus

Ministry of Housing, Communities and Local Government written question – answered on 19th October 2020.

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Photo of Helen Hayes Helen Hayes Shadow Minister (Cabinet Office)

To ask the Secretary of State for Housing, Communities and Local Government, what recent estimate he has made of the reductions in the levels of local government funding due to the covid-19 outbreak.

Photo of Luke Hall Luke Hall Minister of State (Housing, Communities and Local Government)

We are providing local authorities with an unprecedented package of support, including over £4.8 billion in funding for?spending?pressures, comprising of £3.7 billion of un-ringfenced grants and over £1.1 billion for the Infection Control Fund.

In total, over £28 billion has been committed to local areas to support councils, businesses and communities across government. This comprehensive package of support includes direct financial support and cashflow measures for councils, bus and tram services, support for the homeless and both grants and rates reliefs for businesses, as well as several other grants.

We have also introduced measures to address lost income, including:

  • A co-payment scheme to cover irrecoverable Sales, Fees and Charges income in 20/21 with the Government covering 75 per cent of losses beyond 5 per cent of planned income
  • Phased repayment of Collection Fund deficits over the next 3 years
  • A commitment to support the sector through an apportionment of irrecoverable Council Tax and Business Rates losses, to be agreed at the Spending Review

The funding will support the pressures?councils?have reported and the?crucial role they play in?helping the country tackle this crisis, such as their work re-opening the country including working with businesses and shops to enforce social distancing.

Furthermore, on Monday 12 October, the Prime Minister confirmed around £1 billion of additional funding will be made available to councils across England to support them during this unprecedented time. We will publish further information shortly.

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