Fears council could face £100m black hole due to COVID-19 spending pressures

The leader of Leeds City Council has warned that the city could end up tens of millions of pounds out of pocket as a consequence of the coronavirus pandemic.

Monday, 20th April 2020, 4:55 pm
Updated Monday, 20th April 2020, 4:56 pm

Coun Judith Blake has claimed the spiralling cost of Covid-19 is now estimated to be around £130m in lost revenue and extra services to the council.

The local authority has only received £22m towards the cost of the pandemic from central government in funding to date.

Despite a fresh announcement by the Government of an extra £1.6bn to help councils cover the costs of coronavirus, it is not yet known what portion of the new money will be allocated to Leeds.

Sign up to our daily newsletter

The i newsletter cut through the noise

Leeds City Council's leader says the authority needs more money to help tackle Covid-19.

Coun Blake has warned that even a similar amount to the previous award of £22m will come nowhere near in terms of plugging the estimated costs.

Speaking today, Coun Blake said: “We had heard rumours about a figure that was much lower than £1.6bn, so to get that was a significant improvement on what we had expected, and I thank Robert Jenrick for this.

“It is a significant amount of money and hopefully we get a similar share as this would bring us up to £44m.

“But the estimated shortfall at the moment is around £130m – that’s a lost income of £102m and an additional £28m cost for extra services. This estimate is increasing too, as we don’t know how long the crisis is going to go on.

“While we welcome the extra £1.6bn for local government, we recognise this is part of the journey we are on, and this is not going to cover the cost of the Covid-19 crisis.”

She claimed that the lost income would be made up of lost business and retained council tax rates, as well as fees from sport, planning and car parking.

An extra £8.3m is expected to be needed for adult social care services, while children’s social care is estimated to generate an extra £10.6m in costs.

The announcement from the Government followed a letter sent by Coun Blake to the government last week, in which she claimed the council was unable to absorb the cost of a public health crisis such as Covid-19.

Last month, the government announced it would give an extra £1.6bn to local councils to help pay for extra services – £22m of which was allocated to Leeds.

And over the weekend, the Government again announced a £1.6bn boost to councils in their attempts to deal with Covid-19, although it remains unclear how much each council will be given.

According to an announcement from the Department for Housing, Communities and Local Government on Saturday, the extra funding would mean councils can continue to provide essential services.

It added: “This includes getting rough sleepers off the street, supporting new shielding programmes for clinically extremely vulnerable people and assistance for our heroic public health workforce and fire and rescue services.”

Local Government Secretary Robert Jenrick said:   “The announcement of an additional £1.6 billion of new funding to councils means we have now provided them with over £3.2 billion during this pandemic.

“I promised local government would have the resources they need to meet this challenge and today demonstrates my commitment to doing just that. We stand shoulder to shoulder with local government and my priority is to make sure they are supported so they can continue to support their communities through this challenging time.

“Up and down the country council workers are the unsung heroes as we tackle this virus. They are in the front line of the national effort to keep the public safe and deliver the services people need. Never has this been more important and we are all rightly grateful for everything that they are doing.

“This new funding will support them through immediate pressures they are facing to respond to coronavirus and protect vital services.”