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£3.2bn Covid aid for councils ‘not enough’


01 May 2020

The Government has awarded local authorities in England an extra £1.6bn to help meet the costs of Covid-19, taking the total amount of support to £3.2bn. But councils say the funds are unlikely to be enough to cover their additional costs and income losses.

None of the grant is ring-fenced for a particular purpose. The Barnett consequentials mean an extra £300m for the devolved administrations: £155m for Scotland, £95m for Wales and £50m for Northern Ireland.

Newcastle City Council’s latest estimate is that the impact of Covid-19 on the council’s finances in 2020/21 will be in the region of £50m. “We expect this number to rise significantly over the coming weeks and months,” said Matt Wilton, Newcastle’s head of policy.

Newcastle received just over £10m in the Government’s first emergency allocation of £1.6bn to councils.

The London Borough of Waltham Forest received £7.5m in the first round of funding but estimates that the cost to the council over 12 weeks to the end of June will be £25.6m, including the loss of £5m parking income. 

The County Councils Network (CCN) has urged the Government not to scrap funding pledges such as the Housing Infrastructure Fund, which is paying for scores of transport projects, because of Covid-19.

As well as Covid-19 placing additional costs on councils, the CCN warns of the loss of income from council tax, retained business rates, fees and charges, commercial income and asset devaluation. 

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