LG Futures work on impact of COVID-19 on the Collection Fund

As part of the response to the COVID-19 financial outlook, the LGA commissioned LG Futures to conduct an independent review of the likely council tax and business rates income implications of COVID-19, including analysing the effect of possible policy measures.

This work is primarily based on the monthly financial management information returns currently being collected by the Ministry for Housing, Communities and Local Government (MHCLG), supplemented with nationally available data sets on forecast business rates and council tax income.

It seeks to show:

  • The financial implications of local taxation losses on local government under the current funding framework as collected in the financial management information returns to MHCLG; and  
  • How different potential solutions could assist local government in dealing with these financial implications.

We have published a summary presentation (pdf) and a non-technical explanatory note.  

When speaking at the LGA conference on 2 July 2020, Robert Jenrick said that at the Spending Review the Government would announce a ‘fair apportionment’ of irrecoverable council tax and business rates losses, between central and local government, for 2020/21.

The LG Futures work will be aimed at providing a justification for full compensation by Government, as well as designing mechanisms for delivery of Government support on this issue.