£10bn shortfall for councils ‘could hit hopes of recovery’

A £10BN shortfall in council finances due to coronavirus could threaten the full reopening of our town centres, Labour has claimed.

Research by the party found councils in England spent over £800m last year to support economic development in their town centres, including measures to help small businesses to grow, as well as hundreds of millions in capital funding.

However, the financial trouble caused by Covid-19 threatens further investment if holes in budgets needs to be plugged, Labour fears.

The cross-party Local Government Association has estimated that the financial pressure of meeting the costs of fighting Covid-19, including lost income from council tax and other revenues, totals between £10 and £13bn.

Swim England fears as many as 10 per cent of England’s 5,000 pools will never reopen and

Leeds Council has said that every library, museum, and gallery could be closed as a result of the shortfall.

Steve Reed, Labour’s Shadow Secretary of State for Communities and Local Government, said: “Local authorities provide crucial support to many of the small businesses that have kept the country going during the pandemic, and that will be critical to our economic recovery, which is why Labour supported the Government’s efforts to do whatever it takes to get them through the crisis.

“But ministers are threatening to go back on their word, leaving councils on the brink of bankruptcy – and that could spell the end for both small businesses and the high street, which has taken a battering from the economic effects of Covid-19.”

Earlier this month the Government boosted council funds to tackle coronavirus by £500m. It brought the Covid-19 support to local authorities to £4.3bn.