Starmer: Councils’ ‘perfect storm’ in finances
COUNCILS FACE a “perfect storm” in their finances after the coronavirus, Labour leader Sir Keir Starmer warned, as he said the challenge facing local authorities was not party political.
Sir Keir said councils were looking down the barrel of a £10bn financial black hole due to the pandemic, as he addressed the Local Government Association’s (LGA) annual conference.
He said: “After a decade of cuts, the coronavirus crisis and the government’s inaction have created a perfect storm. Councils are faced with much higher costs for key services such as social care, and much lower revenues through falls in areas such as business rates.
“As a result, you’ve estimated that councils now face a blackhole of around £10bn.
“And a report last week showed eight in 10 councils face cutting services or section 144 notices and effective bankruptcy.”
He said: “This isn’t party political – Conservative councils and Labour councils face the same problems
“And as you know better than anyone, this would have real effects on the services we all rely on.”
The Yorkshire Post revealed in May that town hall leaders in the region had warned that they could be forced to effectively declare themselves bankrupt this autumn due to the devastating toll that the coronavirus pandemic is taking on their finances.
Council chief executives across the region said that they would struggle to meet their legal obligation to balance their books if no more government support arrived in the coming months.
Minister for Local Government Simon Clarke maintained last week that the Government is giving councils an “unprecedented
package of support”, including £3.2bn in emergency funding, to tackle the pressures of coronavirus.
But Sir Keir said: “I’m not sure the Prime Minister has understood the scale of the problem local councils are facing, or the immediacy.
“I’m also not sure he understands how central local authorities will be in the next phase of this crisis, and in preventing a second spike.”
The Labour leader said the challenges facing councils were not party political.