The Government has yet to decide how extra cash for councils to deal with the coronavirus crisis will be divided up.
Communities secretary Robert Jenrick announced on Saturday there would be a further £1.6bn funding to deal with the crisis, in addition to the initial £1.6bn already handed out. But the funding formula has yet to be decided.
Last week, the Institute for Fiscal Studies revealed the initial tranche was based on 2013/14 needs assessments, and failed to take account of the number of COVID-19 cases in an area.
In addition, it found some district councils had been allocated just 45p per person in the last round, despite facing significant pressures to deal with coronavirus and rapidly shrinking income. District Councils’ Network chairman, Cllr John Fuller, told The MJ civil servants had ‘recognised the portion [of money] received by districts didn’t go far enough to cover the costs of the housing and humanitarian’ measures they faced.
For many districts, he claimed the double whammy of increased costs and reduced income is 75% of their net budget – and for some 100%. He added: ‘As this morphs from a health emergency to an economic emergency, district councils will be the hardest hit.’
All councils are facing tough financial pressures. Leeds City Council leader Judith Blake has said the council faces a £130m shortfall. The city was allocated £22m in the first round of coronavirus funding, but the £28m in extra costs was dwarfed by a £102m lack of income.
The Ministry of Housing, Communities and Local Government is now looking at the best way to allocate the new round of cash quickly, while taking account of the greatest need.
After announcing the cash at the Downing Street daily briefing on Saturday, Mr Jenrick said: ‘I promised local government would have the resources they need to meet this challenge and today demonstrates my commitment to doing just that.
Local Government Association chairman, Cllr James Jamieson, welcomed the secretary of state’s commitments to give councils all the resources they need to cope with the pandemic, but added: ‘This commitment needs to be rock solid and consistent so councils can stay focused on leading the local response to the greatest challenge we have faced as a nation for decades.’