Political rivals warn council is facing ‘catastrophe’
Town Halls across the region are struggling to balance the books as costs soar during the pandemic but revenues from council-run facilities vanish as they are forced to close down. Has the Government done enough to plug the gap?
THE leaders of the three main political groups on Hull Council have joined forces to warn that the authority risks running out of money if it does not get more support to tackle coronavirus.
In a joint letter seen by The Yorkshire Post, council leader Steve Brady and his Liberal Democrat and Conservative counterparts highlight the “catastrophic” impact of not being able to provide vital services for the city’s deprived communities. Hull is facing a £26.6m hole in its finances, which the letter adds will only worsen the longer lockdown and mitigation measures go on.
It comes as Leeds City Council chief executive Tom Riordan suggested town halls may need a rescue package like the £13bn debt write-off handed to NHS trusts to cope with the financial implications of the pandemic.
The Yorkshire Post revealed on Saturday that a number of the region’s councils could be forced to effectively declare themselves bankrupt because of the toll the pandemic was taking on their finances.
Politicians in Hull said that even if they used all their £20m reserves, together with the two tranches of relief funding from the Government, they still face a financial black hole of over £10m.
Councils have been told to look at redeploying staff and bringing in volunteers and to consider “prudent” use of resources.
Hull Council chief executive Matt Jukes said it was not unreasonable for the Government to ask councils to use reserves, where there were significant levels. But he said Hull’s were “just not sufficient”. Estimates of the fall in income from business rates and council tax have now risen to 20 per cent. “It is that long-term loss of revenue, that is the key thing and it’s not going to come back quickly,” Mr Jukes said.
In the second tranche of funding to authorities, worth £1.6bn, smaller district councils received a much bigger proportion of the funds. Mr Jukes said he did not disagree that district councils needed more support, but it should not have been to the disadvantage of other authorities.
“One of the things I wish is that local government spoke with one voice. Because this is an issue facing councils of every variety, unitary district, metro, parish.”
THE COUNTRY’S fourth most deprived local authority is warning that it is facing a “catastrophic” financial black hole of over £10m, even if it empties all its reserves.
The leaders of the three main political groups on Hull Council have written to the Prime Minister to say the authority risks running out of money if it doesn’t get more support to tackle coronavirus.
Hull Council, together with other local authorities across Yorkshire and the Humber, are struggling to meet their legal obligation to balance their books, as a result of the pandemic.
The letter signed by council leader Steve Brady and Tory and Lib Dem group leaders, Mike Ross and John Fareham, says despite two tranches of emergency government funding worth £17m, and even if they spent their remaining reserves of £20m, they would still be in the red.
It said: “Simply allocating insufficient funding in different ways is going to fail, and, when it does, we will face the almost certain prospect of a considerable number of councils, including Hull, running out of money, not being able to set balanced budgets, and potentially having to stop, in part, or in their entirety, vital community responses to the Covid-19 emergency and other essential services.
“We are not overstating the point when we say that this would be catastrophic... for our communities, for our places, for our regions and for our many partners including the NHS.”
revealed on Saturday that chief executives of many councils in the region have discussed the possibility of making a joint declaration that they have run out of money.
Issuing so-called Section 114 notices en masse, following the example of crisis-hit Northamptonshire County Council in 2018,
Chief executive said support for the care sector had still not hit its peak.
would mean the authorities having to impose severe spending restrictions.
The Hull leaders’ letter complains that the eagerly-anticipated second tranche of funding of £7.15m, was down 26 per cent on the first allocation of £9.8m, one of the largest reductions of any unitary local authority.
It said: “We are afraid this fails to recognise the scale of the challenge that councils in deprived areas, like Hull, are facing and the hugely limited resources we have to try and deal with them. They highlight recent Office for National Statistics data showing that areas with the highest levels of deprivation had double the death rate from Covid-19 cases, as the most affluent areas.
The council is currently forecasting a £26.6m loss of income, while costs have risen sharply in areas like social care.
In Hull £700,000 has already been spent housing an extra 100 homeless people in hotels, B&Bs and large houses, with costs continuing to rise.
Chief executive Matt Jukes said his teams’ work providing support for crisis-hit care homes and residential homes had not yet reached its peak.
He said: “The pressures on that system are just building up, they are not decreasing.”
He said care home staff were being “deluged” with new guidance from government about the actions needed to tackle the pandemic.
And he added: “As testing rolls out now for care homes and for council workers and is getting more accessible, we’re seeing more staff, particularly in care homes having to self isolate after testing positive and that’s putting a massive pressure on those systems.”
The Ministry of Housing, Communities and Local Government said £3.2bn had been handed in crisis funds to councils across the country.
A spokesman said: “The 22 councils in the Yorkshire and the Humber region will receive £313.2m of this to deal with the pressures of coronavirus, while their core spending power rose by £268.4m this financial year even before additional emergency funding was announced.
“The Government will continue to work closely with councils as the pandemic progresses.”
The second tranche of funding was based on population to “ensure a fair split of funding” across councils, with smaller district councils getting a much bigger proportion of the funds at the expense of other authorities.