Coronavirus funding for Cambridgeshire councils ‘may not be enough’

The Government has given £3.2 billion in emergency Covid-19 funds to councils nationally, £44.7 million of which has gone to Cambridgeshire and Peterborough councils.

Councils from Liverpool to Windsor have warned the crisis could bankrupt them, and while in Cambridgeshire no such dire warnings have been issued, a gap between the current government support and the expected costs is apparent.

The leader of Cambridgeshire County Council told the Local Democracy Reporting Service it has already allocated the £26 million it has received but that it will “only last until the end of June”.

According to the Local Government Chronicle, the local government secretary Robert Jenrick told a parliamentary committee in May that “our impression is (funding provided) is sufficient so far to support councils in weeks and months ahead. If that changes we will have to change our response as well”.

He reportedly said some councils’ estimates of their projected losses from the pandemic and lockdown are “highly speculative”.

The leader of the county council, Conservative Cllr Steve Count, said his authority is “still working through the full implications” of the crisis on the council’s finances.

He said: “As a result of the coronavirus, the council is going to face significant additional costs in order to support the most vulnerable members of our society.

“We’re still working through the full implications, but the money we have received has already been allocated and will only last us until the end of June.

“We won’t know the full effect of the coronavirus for months, but I will keep up the discussions with government and build evidence for more sustainable funding to fight this virus and support our communities.”

A county council document shows figures on lost income currently “suggest an estimated 17 per cent drop” for the first quarter “which is due to the Covid-19 situation with libraries, on street parking, weddings etc. reducing or stopping services and also the financial impact on the UK population”.

Councils are not immune from changes in the local and national economy. Over the past 10 years their funding model has shifted, with councils receiving less from central government and making more from providing services and from making investments, usually in property.

Council tax and business rates are a major source of income, and both could be impacted by the virus and the subsequent lockdown.

The district councils collect business rates in their areas and pay most of it onto central government, but some of those payments have been deferred to take pressures off councils’ cash flows. The council tax they collect, however, also goes to fund the county council, fire and police services, as well as parish councils. The district authorities are obligated to pay on a fixed sum, regardless of how much they collect.

Huntingdonshire District Council said it is “closely monitoring” the financial impact of the pandemic and subsequent lockdown. It said more than 2,500 households have so far applied to defer council tax payments, but the authority said those deferments so far account for “only three per cent of the collection”.

A spokesperson said: “We continue to receive revenue in the form of council tax which remains strong and very close to pre-Covid collection levels enabling us to continue with normal precept payments to the other authorities.”

A spokesperson for the Ministry of Housing, Communities and Local Government said: “Council workers are the unsung heroes as we tackle this pandemic and by providing councils with over £3.2 billion in the fairest way possible we’re working with them to tackle the immediate pressures they have told us they’re facing.

“Councils in Cambridgeshire will receive £44.7 million of the total share of £3.2 billion of this to deal with the pressures of coronavirus, while their core spending power rose by £39.2 million this financial year even before additional emergency funding was announced.

“The Government will continue to work closely with councils as the pandemic progresses.”

Ben Hatton, Local Democracy Reporting Service