Coronavirus: English councils 'on brink of financial failure'

Councils in England have warned that the coronavirus crisis is pushing them to the brink of financial failure.

The Local Government Association said that without more funding some authorities would be forced to cut "vital" services.

Councils face increased costs from supporting vulnerable people, while income from fees and rates is falling.

The government said it was providing £1.6bn extra to help them "provide services" during the pandemic.

The LGA welcomed this, but said more money was needed and called for a "cast-iron commitment" to cover the costs of coronavirus-related work.

Many councils were already under severe financial strain before the coronavirus crisis, particularly those responsible for social care.

Since 2010 many local authorities have had to cut services to balance the books. The crisis has resulted in extra pressure on services that support the most vulnerable: the elderly, disabled and homeless.

At the same time income from fees and charges has dried up, and there's fear that council tax revenues may fall as people face financial hardship.

At the start of this crisis, council leaders said they largely felt reassured by government promises of support. Now - with so much demand on the Treasury - there's scepticism about how much more funding will be forthcoming.

Local government, which often feels like a forgotten frontline service, wants to ensure its voice is heard among the calls for support. Hence this stark warning about the potential consequences for crucial services if it doesn't get more cash.

The LGA says councils are spending more on helping disabled, older and homeless people through the crisis, but leisure and planning services at many town halls have been scaled back or closed, meaning income has "dried up".

Richard Watts, chairman of the LGA's resources board, said: "Additional funding is urgently needed to help councils get through this crisis, support the vulnerable and adapt to life once we defeat this virus, when our local services will be needed more than ever to help communities rebuild.

"It would be wrong and unacceptable if councils are then forced to make further cutbacks to the very services that will have helped the nation through this crisis and the key workers who are producing heroics on the front line see their jobs placed at risk."

The government has announced councils will be able to defer £2.6bn in business rate payments owed to central government.

A Ministry of Housing, Communities and Local Government spokesperson said: "We've already provided £1.6bn of additional funding and have announced new measures to help ease immediate cash flow pressures faced by councils in England."