#COVID19 is creating a perfect storm for councils’ finances - simultaneously increasing costs and reducing income.

The budget shortfall is predicted to be around £2bn – for this year alone.

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#CouncilsCan

Since the pandemic struck, #LocalGov has worked hard to keep residents safe & local economies afloat by, among other things:

- Supporting shielding residents
- Housing rough sleepers
- Administering business grants totalling billions
- Managing & mitigating local outbreaks

At the same time, councils’ incomes from key revenue sources like parking and from leisure services have fallen.

According to new @TheIFS research, the combination of these pressures will create a £2bn budget shortfall for councils this year – even after taking into account the welcome additional money made available to councils by government in recent months… https://twitter.com/TheIFS/status/1295971256559378442

…and big falls in council tax and business rates revenues will hit councils’ budgets next year, too.

This will leave some councils facing a difficult choice:

Deplete their reserves to dangerously low levels or - where they don’t have these - cut spending on vital local services.

Councils have successfully led their communities through the initial shock of the pandemic.

Now they need to be empowered to lead them out of this crisis and support recovery across the country.

They cannot do this successfully and also address pressures in social care and other services if they are having to focus on budget cuts.

Councils want to continue working with government on the further measures and funding needed to protect local services.

We are calling on the Government to meet all extra cost pressures and income losses in full so that #CouncilsCan continue to deliver for their residents and the country.

#ReThinkLocal https://www.ifs.org.uk/publications/14977