“Councils continue to face significant extra cost pressures and huge income losses as a result of the pandemic. The Government’s commitment to fund a portion of lost income from fees and charges is a step in the right direction but does not cover full losses, nor does it extend to commercial income losses."
Responding to the report by the Commons Public Accounts Committee on council commercial investments, Cllr Richard Watts, Chair of the Local Government Association’s Resources Board, said:
“Councils have faced a choice of either accepting funding reductions and cutting services or making investments to try and protect them. As the Committee rightly highlights, this was an approach that was encouraged by government. Investments are not only made to try and plug funding shortfalls but also to help contribute to local economies.
“Councils continue to face significant extra cost pressures and huge income losses as a result of the pandemic. The Government’s commitment to fund a portion of lost income from fees and charges is a step in the right direction but does not cover full losses, nor does it extend to commercial income losses.
“We reiterate our call to Government to meet all extra cost pressures and income losses from fees and charges and other sources, including commercial activity, if councils are to avoid having to make tough decisions on in-year cuts to services to meet their legal duty to set a balanced budget this year.
“Access to cheaper short-term loans with delayed repayments on all new and existing debt would also help them tackle the significant cash flow problems that are threatening their efforts to lead communities through the immediate COVID-19 crisis and beyond.”
Notes to editors
- The LGA represents more than 330 councils of all types across England. We work on behalf of our members to support, promote and improve local government.
- It is councils who had led communities through the COVID-19 crisis. Our recent polling shows that 71 per cent of residents trust their council and two thirds are satisfied with the way their local council runs things in their area. Our new discussion paper - Re-thinking Local - sets out how councils must now be empowered locally-lead the COVID-19 recovery and tackle the economic, environmental and community challenges that we will face as a result of the pandemic.