Government accused of ‘backtracking’ on funding promises to councils

Senior Lewes councillors have criticised local government secretary Robert Jenrick, accusing him of “back tracking” on funding promises.

Thursday, 7th May 2020, 3:34 pm
Local Government Secretary Robert Jenrick (Photo by PIPPA FOWLES/10 Downing Street/AFP via Getty Images) SUS-200705-152803001

The comments, from Lewes District Council leader Zoe Nicholson (Green) and cabinet member Chris Collier (Labour), came after Mr Jenrick spoke in front of a commons select committee on Monday (May 4). 

Mr Jenrick told the select committee that councils should not “labour under the false impression” that all covid-19 related costs would be covered by central government.

However, he also said he would ensure councils are compensated for the “specific tasks” asked for by central government.

He said: “I think we have been very clear actually about the specific tasks we have asked of local councils. 

“If any council leader or officer is watching these proceedings and is uncertain, then I would strongly encourage them to contact the MHCLG and discuss any of those issues. 

“We wouldn’t want anyone to labour under the false impression that what they are doing is guaranteed to be funded by central government. 

“I don’t in all honesty think those disagreements or misunderstandings are widespread. I think the schemes we have asked of local councils are pretty well understood. These are national programmes such as the dispensing of business grants.”

He added that the government is working with local authorities to monitor the financial impact of the coronavirus pandemic.

He said the government had already provided financial support – in the form of two £1.6bn funding packages and a £4bn cashflow injection – to help councils cover “irrecoverable losses” incurred by the lockdown, such as the loss of income from parking charges.

However, Mr Jenrick’s comments came in for criticism from senior Lewes councillors.

In a press statement issued on Wednesday (May 6), council leader Zoe Nicholson said she believes the comments show the local government secretary is preparing to “renege on clear promises” to cover the extra spending by councils during the covid-19 pandemic.

Cllr Nicholson said: “Robert Jenrick’s comments were outrageous.  He has performed a quite brazen volte-face that leaves councils staring into a financial abyss.

“He promised to support our essential work to support vulnerable people and maintain services during the most extraordinary period in the UK in over 70 years and is now implying our costs won’t be covered.

“This is nothing short of a confidence trick that could end up paralysing public services.”

Similar criticism was raised by Chris Collier, the council’s cabinet member for performance and people.

Cllr Collier, who is also leader of the council’s Labour group, pointed to the fact that the first round of government funding brought in less than £40,000 for Lewes. The second round saw a little over £1.02m come in to the authority.

He said: “The government will point to two bail-outs, the first one was derisory and the latest over a million.

“While I welcomed the increased support it smacks of policy on the hoof, no plan or strategy at all, and unless Robert Jenrick keeps his promise to fund local government in the longer term he will be remembered as the double-dealing minister who left council on the brink of bankruptcy.”

The councillors’ comments come ahead of a cabinet meeting to be held on Thursday (May 7), at which they will discuss a report warning the pandemic could cost Lewes District Council more than £19m.

The report warns the council’s predicted annual income – from council tax, business rates and other charges – could be set to fall by £11.57m, as a result of the coronavirus pandemic.

At the same time, the report adds, a rising demand for council services during lockdown could see costs increase by more than £8m – meaning the authority could  have to find more than £19m in order to balance its books.

Addressing similar warnings from other councils at the select committee, Mr Jenrick said it was “quite soon” for local authorities to be making judgements on the long-term impacts of coronavirus on business rates and council tax collections.

He said: “I think it is quite soon to make a judgement on that, because we don’t know yet the length of the lockdown measures and we certainly don’t know the degree of economic disruption we are going to face as a country in the months ahead.

“I don’t think we will be in the position to make that judgement for some time.”

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