Warning issued over local government finances

PUBLISHED: 07:00 10 May 2020

Devon County Council candidate Ben Ingham.

Devon County Council candidate Ben Ingham.

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A warning over the state of local government finances has been issued – with some councils in Devon predicting they could run out of money by the summer as a result of the coronavirus crisis.

A warning over the state of local government finances has been issued – with some councils in Devon predicting they could run out of money by the summer as a result of the coronavirus crisis.

Councils across the country have been at the forefront of the response to the coronavirus pandemic.

From setting up community wellbeing hubs to help the most vulnerable, to supporting businesses, they are on the front line.

But councils, having already had their funding slashed by central government over the last 10 years, are facing their own fight to survive coronavirus. Finances before the coronavirus crisis were already stretched and cash reserves were limited.

In recent years, councils have been encouraged to become businesses.

Income from car parking charges – a staple of keeping local government solvent – has dropped dramatically. Exeter City Council set its balanced budget based on receiving an average of £170,000 a week from car parking charges. Recently it took around £1,000.

Central government has pledged to help local government, but the first tranche of funding, £1.6 billion to councils, saw districts across Devon only get limited support, far short of replicating lost income and coronavirus expenditure.

Cllr Ben Ingham, leader of East Devon District Council, said: “This is a very difficult time for local authorities.

“The council has been affected by the consequences of Covid-19 through additional costs and, more significantly, the impact of a drop in income from fees and charges, which pays for the funding of services.

“Certainly, we need to monitor this situation very carefully and accept that an appropriate solution may take some time to evolve.

“It is already clear that we will need considerable additional financial support from central government as we move through the remainder of the year.

“So the announcement by Government of the provision of additional funding to support local authorities is welcome and we are hopeful that they have listened to our concerns and taken our needs into account. We look forward to learning how much we will receive.”

Central government has announced a further £1.6 billion of funding to meet additional pressures arising from the pandemic and help councils continue to deliver frontline services – funds which will be un-ringfenced – but has not yet confirmed the allocations.


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