Local Government Finance: Coronavirus

Ministry of Housing, Communities and Local Government written question – answered on 25th March 2021.

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Photo of George Howarth George Howarth Labour, Knowsley

To ask the Secretary of State for Housing, Communities and Local Government, what representations he has received on funding for local government to (a) increase Government support to pre-2010 levels and (b) ensure that local government additional spending on Covid-19 is fully recovered by councils.

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

Core Spending Power for local authorities in England could rise from £49.0 billion in 2020-21 to up to £51.3 billion in 2021-22, depending on local decisions - a 4.6% increase in cash terms. If councils do decide to take up the entirety of the increase on offer, they will see an overall increase in line with last year’s. This recognises the resources councils need to meet their pressures and maintain current service levels. These resources were reflected in the Local Government Finance Settlement for 2021/22, which received broad support from the majority of those who responded to the consultation and was passed in Parliament unopposed.

We are collecting monthly financial monitoring returns to better understand the additional costs councils are facing due to COVID-19. According to the latest of these returns, the estimated expenditure pressures for the financial year are £7.3 billion. The Government has allocated over £8 billion directly to councils since the start of the pandemic specifically for their expenditure pressures. Furthermore, the Chancellor took action at the Spending Review to provide local authorities with over £3 billion of additional support in 2021-22, taking total support committed to local authorities to tackle COVID-19 to over £11 billion. This level of support has been broadly welcomed by the sector.

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