Chronic under funding of Local Authorities in a time of crisis
As our local district authority, in combination with Norfolk County Council, it has been at the forefront of responding locally to this crisis - and yet it is not being resourced to carry out these critical functions.
There are a lot of people who think the middle of a pandemic isn't an appropriate time to be 'political'. Clearly they have a point. In the midst of a crisis everyone has to pull together for the greater good.
But when your capacity to 'pull together' is being eroded by poor decisions, many of them alas on ideological grounds, it is right and proper to point them out. How else will the change sought and the corrections needed take place unless people raise said concerns?
One such set of concerns is highlighted below in a letter from Cllr Alan Waters, Labour leader of Norwich City Council to Prime Minister, Boris Johnson.
As our local district authority, in combination with Norfolk County Council, it has been at the forefront of distributing grants to small and medium size businesses, looking after the homeless, organising a community food hub, managing Covid-19 volunteers and many other tasks essential to our collective well-being. And yet it isn't being resourced to carry out these critical functions.
I will continue to do all I can to raise the plight of local authorities in (virtual) Parliament, and do all I can to support our own local authority get through this crisis.
Here is the letter:
The Rt Hon Boris Johnson MP
SW1A 2AA
NR2 1NH
First, may I wish you a speedy recovery.
My purpose in writing to you is to express my grave concern about your Government's failure, as yet, to provide the necessary sustainable financial support for local authorities during the greatest crisis our country has seen since the Second World War.
There have been plenty of warm words. The Secretary of State for HMCLG, Robert Jenrick, wrote to local councils on the 18th April to praise, "the unsung heroes" of local government and the vital role they are playing supporting communities during the coronavirus pandemic. In short: a contribution as vital as that of the NHS. Local Government will also be at the forefront of the recovery.
To be able to sustain our vital work as the key partner of central Government, councils need to be fully compensated for both the increased costs and reduced income the sector is facing as a result of C19. This needs to be real time funding that acknowledges local government is tackling this crisis on the back of the highest level of cuts of any part of the public sector since 2010.
I note that the Government recently wrote off debts of PCTs across the country which essentially constituted a bailout of several £100ms of funding to health service. A similar bailout of councils will be required to get us back to where we were just 3 months ago.
For your information Prime Minister, I have provided some detail below about the financial aspects of delivering the covid-19 response by Norwich City Council:-
• Norwich has managed its finances very well over the past decade as government funding has been cut to zero in terms of Revenue Support Grant. The city council has already made efficiency savings, including the generation of new income streams of some £37.4m over the last ten years, with further gross savings/ increased income of £2.1m for 2020/21.
• The current £105k allocation of emergency funding is nowhere near sufficient to cover the costs of the vital role the council is playing in organising a community food hub, managing volunteers, administering business grants, as well as providing accommodation to rough sleepers. Current estimates suggest the council will need to spend up to £0.75m in providing these key covid-19 responses, as well as supporting its suppliers and enabling its workforce to work remotely on the delivery of core council services.
• Norwich City Council is reliant upon funding from a range of sources that will be heavily impacted by the coronavirus pandemic. These include, but are not limited to, rent from commercial properties, car-parking receipts, income from leisure and parks facilities and market stall rents. The cash flow and budgetary impact will be significant; for example, lost income includes up to £630k a month in car parking receipts and, based on initial estimates, potential delays or non-receipt of £1.6m in commercial rents. Income from car parks and commercial activities is used to pay for vital local services.
• The wider economic impacts on the council's council tax and business rates income are expected to be significant, and the outcomes will clearly be exacerbated if the current situation continues longer than expected. In addition, there will also be impacts on the rent and service charge income from social housing tenants and leaseholders – around £60m is collected in social rents annually. Delays will result in further cash flow and budgetary difficulties.
• Overall, our initial estimates suggest the loss of income to the council could be up to £14m. The council's reserves are insufficient to cover the likely impacts without having significant consequences on the council's medium term financial sustainability. District councils will be key in driving the social and economic recovery from Covid-19; in order to do this and deliver vital services to local people, the sector urgently needs additional funding to cover the full Covid-19 impact.
We simply cannot continue to deliver the vital services local people need and deserve without adequate additional funding from the government. Nor will we be able to fulfil the necessary functions of a key partner of Government and the NHS at this critical time.
I look forward to urgently hearing from you on how you will address this issue.
Councillor Alan Waters,
Leader, Norwich City Council.
CC: Rt Hon Robert Jenrick MP, Secretary of State for Housing, Communities, and Local Government
Rt Hon Rishi Sunak MP, Chancellor of the Exchequer
Cllr James Jamieson, Chairman, LGA
Cllr Nick Forbes, Leader of LGA Labour Group
Sir Keir Starmer MP, Leader of the Opposition
Steve Reed MP, shadow Communities and Local Government secretary
LGA Labour Group