Local government could need as much as £10bn in total extra funding if it is to manage the impact of the Covid-19 lockdown, according to one of the UK’s leading section 151 officers.
The estimate came from Tony Kirkham, director of resources at Newcastle City Council, speaking exclusively to Room151 about the pandemic’s affect on local authority financing.
To watch the full interview with Tony Kirkham click here.
Kirkham’s estimate builds from modelling that shows that Newcastle’s current budget could be £50-£60m short because of the crisis.
“It’s all dependent on how long we stay in lockdown,” said Kirkham, “and it’s important we stay in lockdown as long as it takes in order to avoid the impact on people of a second wave [of infections].
“But based on our modelling we would need £50m-£60m from government in support for the impact. If we multiply that up, we’re looking at north of £10bn of support for local government.
“As a figure it sounds large but if you look at the £13bn the government was able to write off the deficit for public health trusts, we would be in that envelope.”
So far Westminster has announced two tranches of support for local government, both of £1.6bn.
However, at the current rate of release, Kirkham estimates there could be as many as three more tranches of funding to come.
Local government, he said, was impressed by the Westminster’s initial quick reaction to the funding crisis created by the lockdown, and dialogue remains underway to persuade central government of the issues faced by councils that were still in austerity mode to make savings when the pandemic hit.
“Hopefully, the dialogue is improving and the government will understand the size and scale of the problem. I can’t expect them to write a blank cheque,” said Kirkham. “But if they want to do this in a sensible way, national and locally, then we will need more tranches of support.”
