Councils call for £5bn 'income guarantee'

By Laura Sharman | 18 May 2020

The County Councils' Network (CCN) is calling on the Government to provide a £5bn 'income guarantee' to avoid financial collapse during the coronavirus pandemic. 

Under the plan, the councils would get a guaranteed income from council tax, business rates and income from fees and charges. 

The plan extents proposals from Society of County Treasurers' president Gary Fielding for the Governemnt to underwrite council tax and business rates, as mooted in The MJ last week. 

CCN has wared some councils are facing Section 114 notices due to plunging income and increasing cost pressures. 

The councils represented by CCN estimate they will lose £430m from fees, charges and other income, with non-payment of council tax and business rates reaching £2.4bn.

It is calling on the Government to compensate councils for their lost income in addition to providing emergency funding for additional costs.

Cllr David Williams, chairman of the CCN, said: 'The government has given comprehensive protection to the health service and businesses and we want to work with government to deliver the same for councils. However welcome one-off injections of resources have been, councils cannot budget on verbal reassurances alone and therefore now is the time for the government to step forward with firmer financial guarantees to stem fears that councils will have to declare insolvency.

'By setting out an initial guarantee of £5bn, this will provide councils with the confidence and means that they need to spend what is required to defeat the spread of the virus, save lives and support private enterprise to drive the economic recovery.'

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