The government has announced the distribution of its third tranche of funding for councils for the impact of coronavirus. The £500 million brings the total to £3.7 billion. According to the Local Government Chronicle this equates to 83% of cost pressures (extra spending). Councils would have to find £766 million without funding or make cuts.
In addition councils face £6.5 billion lost income resulting from the lock-down. They are waiting from the detail of the compensation which will cover 70% of sales, fees and charges lost. So the gap between estimated loss of income and government compensation will be around £1.950 billion. The combined shortfall would be £2.716 billion. It may be more.
Johnson’s comment that there would be no return to austerity obviously does not apply to local government. Without pressure brought to bear on the government to execute another u-turn, to fully fund councils for extra costs and losses then the government will be imposing a new phase of austerity on local government.