‘A pack of cards about to collapse’- dire warning over money for councils
PUBLISHED: 10:44 25 June 2020 | UPDATED: 10:55 25 June 2020
The leader of a Norfolk council has warned the way local authorities are funded is broken and akin to a “pack of cards about to collapse”.
Alan Waters, leader of Norwich City Council, says partly due to the pressures of dealing with the impacts of coronavirus, City Hall needs to save £7m this year and £14m over the medium term.
Mr Waters, on behalf of the Labour-led council, wrote to prime minister Boris Johnson saying it is essential that the government foots the bill for the efforts councils like his have made to help support people during the coronavirus pandemic.
At a virtual council meeting this week, Mr Waters said he had received a response from government minister Simon Clarke, which recognised the efforts of local government.
But Mr Waters said: “The focus in Simon Clarke’s letter has focused on the immediate pressures created by the pandemic, with little said about the longer-term financial sustainability and repair of local government finances to take us beyond this phase of the COVD-19 health emergency.”
Councils are required to deliver balanced budgets each year, but when they cannot, their finance officers issue a section 114 notice - declaring themselves effectively bankrupt.
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Some councils, including Leeds, Wiltshire and Trafford have signalled they might meet the criteria to have to do that and Mr Waters said: “The current circumstances are set in the context of 10 years of deep cuts in local government funding which has hit poorer and less well-resourced councils hardest.
“It has exposed, as Covid-19 has done in so many aspects of our lives, deep structural inequalities in society. Frankly, the model of local government funding is broken. It’s wobbly - a pack of cards about to collapse.”
Norfolk County Council is facing a £118m funding gap up to 2024/25 and says the amount of money the government has awarded to cover costs and loss of income due to coronavirus is some £20m short.
Andrew Jamieson, cabinet member for finance, said, without more help and certainty over funding in the longer-term, the council faced a “major challenge” and services could have to be changed or cut.
But he said the council was not “remotely close” to issuing a section 114 notice.
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