Commons Sense

House of Commons · Ministers' Questions

Covid-19: Local Authority Revenue

Tuesday 28 April 2020 · 4 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 1 Partly answered 3 Not answered 0

Key points

  • Local authorities have received a total of 3.2 billion in additional funding to support them through the COVID-19 outbreak.
  • Wigan Council has received 10.5 million from the 1.6 billion allocated to local authorities, which they can use as they see fit.
  • Luton Council has received 5.4 million from the government's funding package for local authorities impacted by the pandemic.

Topics (select to filter)

Questions & Answers

Q1 Jeff Smith Lab Manchester Withington
Local Government
Context

The question arises from the financial strain local authorities face due to the pandemic, including significant reductions in income and increased spending on frontline services.

Question

What recent estimate has been made of the reduction in local authority revenue as a result of the covid-19 outbreak?

Answer from Christopher Pincher

We are working closely with the sector to develop a good understanding of the pressures that local authorities are currently facing. We have announced £3.2 billion of additional funding and measures to support immediate cash-flow concerns. This is a very significant package of support, which responds to the range of pressures that councils have told us they are facing.

Partly answered

Not addressed: The estimate of revenue reduction was not provided.

How: Under Review

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Q2 Yvonne Fovargue Lab
Local Government
Context

Wigan Council faces a significant loss of income and increased spending on frontline services as a result of the pandemic. The council has also lost dividend from Manchester airport, exacerbating financial pressures.

Question

Wigan Council estimates that it will lose £40 million in income this year, while spending on frontline services has rocketed because of the coronavirus crisis. In addition, the loss of the dividend from Manchester airport will exacerbate that pressure.

Answer from Christopher Pincher

Wigan Council has received £10.5 million of the original £1.6 billion that has been allocated to local authorities, and that funding is unringfenced so they can use it as they see fit. As the House will know, local authorities will be fully compensated for the business rates loss that they have incurred.

Answered
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Q3 Rachel Hopkins Lab Luton South and South Bedfordshire
Local Government
Context

The Local Government Association and CIPFA advised that financial support is needed for councils experiencing reduced revenue from commercial sources. Luton Council's reliance on London Luton airport's income has been disrupted by the pandemic.

Question

Luton Council relies on commercial income gained through its ownership of London Luton airport, which has dried up overnight. The Government promised to do whatever is necessary to financially support councils. When will they be introducing funding for councils that have lost considerable commercial income?

Answer from Christopher Pincher

Luton Council has received £5.4 million of funding from the very significant package that we have put together. We have also deferred £2.6 billion in payments to central Government and we will work with local authorities to understand their particular needs.

Partly answered

Not addressed: A specific timeline for introducing funding was not provided.

How: Under Review

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Q4 Jeff Smith Lab Manchester Withington
Local Government
Context

Manchester Council faces a forecasted loss of £125 million in income this year, resulting from the coronavirus crisis. This represents the funds that have kept services operational amidst previous public sector cuts.

Question

The council is forecasting £125 million in lost income this financial year as a result of coronavirus. That money has kept services going in the face of some of the harshest cuts in the public sector and is allowing the council to lead the response to covid-19. Will the Minister pledge to fully reimburse councils for lost income?

Answer from Christopher Pincher

Manchester has received £18.6 million in the first tranche of funds made available to local authorities, and more will come. We are going to work with local authorities to ensure that they get the help they need to see them through this crisis.

Partly answered

Not addressed: A pledge to fully reimburse was not given.

How: Under Review

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