A series of tweets by Newsnight’s Lewis Goodall last night made claims about the formula used to allocate the emergency coronavirus funding to councils.
This blog sets out why we used the funding formula and the broader support available to councils.
At the outset of the emergency we said we'd give the councils the resources they need to respond to this unprecedented crisis and we'll continue to work closely with them as they support their communities during the pandemic.
Even before the pandemic, councils’ core spending power was set to rise by over £2.9 billion this financial year alone.
On top of that, we’re providing councils with over £3.2 billion in the fairest way possible to help them tackle the immediate pressures they’ve told us they’re facing.
It's important to understand how and why this money was allocated.
And it’s important to be clear – this funding is for councils to provide the services they need to support local communities through the pandemic and not for funding the NHS response. The Chancellor has said the NHS will get whatever resources it needs - whatever the cost – and over £6.6 billion has been allocated to support our health services.
The suggestion we have chosen to favour certain councils over others is wrong.
The two £1.6 billion tranches of funding had different aims, so it’s right that different factors were considered in allocating them.
The first tranche was allocated in response to adult social care pressures, reflecting the importance of this issue in responding to the impact of the virus.
The second has been allocated based on size of the population, reflecting the nature of the pandemic as a national emergency and the uniform steps that local authorities need to take.
As well as providing extra services, councils face a loss of income. Council-run leisure facilities remain largely closed, and as people do the right thing and stay at home they’re not using council car parks as much. The split of funding in the second allocation between county and district councils also reflects this loss of income.
Taken together, this ensures a fair allocation of funding across the country to local councils and their residents at this difficult time. Over 90% of resources are going to local authorities with social care responsibilities.
As well as the £3.2 billion, the Prime Minister has announced an additional £600 million yesterday that will be channelled through councils to help reduce infections in care homes, and to support wider workforce resilience.
These aren’t the only ways we’re supporting councils. We’re also:
- Letting councils defer £2.6 billion in business rates payments
- Paying £850 million in social care grants up front in April.
- Creating a £500 million hardship fund to let councils reduce council tax for vulnerable households.
- Paying £197 million to public transport operators and councils to maintain bus, tram and metro train services running and allow social distancing on board
- Offering the Small Business Grant Fund and Retail, Hospitality and the Leisure Grant Fund, which have paid out £9.1 billion in grants to over 742,000 business premises across the country.
- Making available £6.1 million to help cover the day-to-day costs of Business Improvement Districts. These are local business partnerships that bring developers and communities together to provide local leadership, drive regeneration and deliver projects and additional local services.
It’s worth noting that that the LGA’s numbers are based on estimates of the full-year costs of the impact of coronavirus. Since no one yet knows the future path of the pandemic, these are inevitably unreliable.
We’ll collect monitoring data on a monthly basis to assess the cost of the pandemic to councils as they support their communities through this national emergency.
We said we’d stand behind councils and give them the funding they need. With the additional £3.2 billion of funding for councils distributed in the fairest way possible and the wider support we’ve made available, we’re doing exactly that.