Coronavirus likely to add £100 million to local council budgets

THE leaders of all six Oxfordshire councils have written a joint letter to Government and the county’s MPs setting out the scale of the financial impact of the coronavirus (COVID-19) situation across the local authorities.

Looking across the costs of delivering additional services, spend on emergency suppliers and the significant impact on normal income streams, the councils anticipate the negative financial impact of the virus in the 2020/21 financial year will be around £100m, with expected knock-on impacts in future years. 

To date, Government has allocated £14.9m in additional funding to councils in Oxfordshire, and only £0.3m of this for the District and City Councils. 

The six council leaders welcomed the announcement on 18 April of an extra £1.6 billion to councils across England, but urged the Secretary of State for Housing, Communities and Local Government, Rt Hon Robert Jenrick MP, to ensure further Government support is provided to meet the funding shortfall. Without this support, authorities across Oxfordshire will become financially unsustainable with depleted or no reserves, and some could be unable to set a legal budget for 2021/22.

The six councils have made rapid adjustments to redeploy staff to meet new areas of high demand, in particular taking significant action to protect and support vulnerable people across Oxfordshire. This includes establishing locality-based services to provide support to vulnerable people, to respond to referrals from the NHS, GPs, pharmacies and work with large networks of volunteers to deliver a multitude of supporting activity. It also includes dedicated customer contact teams proactively contacting those identified as vulnerable by the NHS as being at risk and connecting them into local support services and essential supplies.

At the same time the councils have implemented social distancing and remote working for their own staff while continuing or stepping up their work on protecting children at risk of abuse and neglect; supporting older people and disabled adults who need help with the tasks of daily life; re-housing homeless people with appropriate accommodation and support services; administering the government’s grant and relief schemes to businesses; collecting waste from homes, and providing public health advice.

While other services are temporarily closed to meet social distancing requirements – including leisure facilities and libraries – these need maintaining and continue to incur costs.

As is the case for most councils these days, Oxfordshire’s councils are not fully funded by government grants or income from taxes, but from revenue-generating activities – from car parking, fees and charges, income from rents and services we provide – which fund many of the services provided for residents and businesses. These income streams have all been severely damaged by the coronavirus restrictions and impact on the local economy. For some of the councils, the scale of lost income is of greater financial impact than the additional costs being incurred.        

All six councils say they remain committed to providing the support and services that residents need and to protect our communities but will need additional Government financial support to enable this vital and lifesaving work to continue. 

UPDATE – April 30- Rt Hon Robert Jenrick has written this letter (110.9 KB) to all council leaders in England regarding COVID-19 funding.