Rochdale Council faces £28.1m funding shortfall due to Covid-19
Date published: 25 June 2020
Number One Riverside
Rochdale Borough Council is facing a £28.1m shortfall in funding due to Covid-19, an investigation from the BBC Shared Data Unit has found.
Nearly nine out of ten local authorities face budget deficits as a result of the coronavirus, with the estimated shortfall forecasted to be as high as £3.7bn.
Councils face increased costs from supporting vulnerable people, while their income from fees and rates is falling.
Two government grants to councils in England worth a combined £3.2bn have already been announced, with Rochdale receiving £13.62m in emergency funding.
Leaders previously said funding already allocated was "not even close" to covering costs or money that had already been spent.
Of 173 local authorities who responded, 148 (86%) predicted a budget shortfall.
Rochdale Council, which has £131m in usable reserves, said it would look at meeting the deficit by looking at other options, which haven’t been explored yet, adding: “Work is ongoing to assess the council’s future budget pressures.”
Rochdale Borough Council leader Allen Brett said: “We're doing what it takes to support our residents and businesses, but there is no doubt we are taking a severe financial hit, due to lost savings, additional costs to services and loss of income.
“Clearly local government is facing unprecedented challenges and although we have been promised government money to help, this still leaves a huge gap. I am pleased to see how magnificently our staff are stepping up and we have so many people doing a wonderful job, but the reality is that a decade of public spending cuts have left a huge hole in council finances and we could face more problems if there are future spikes.
"We cannot overlook the increased risk and financial pressures this places on our authority. The government need to provide us with the resources we need to continue this fight and assist in our national recovery. Going forward, more sustainable funding for councils is crucial."
Assistant Portfolio Holder for Finance, Councillor Rana said: "Councils have been on the frontline in fighting Coronavirus. At the beginning of the crisis, the government told us to do 'whatever it takes'. They explicitly promised councils they would receive all the support they needed and asked us to set aside financial concerns to help the national effort to beat the virus.
"Without urgent support, Rochdale Council will be forced to introduce a new wave of cuts and be unable to reopen key services. The crisis has been made worse by ten years of government austerity cuts to our budgets. Further cuts of £26m will be catastrophic."
Councillor Richard Watts, Chair of the Local Government Association’s Resources Board, said: "Emergency government funding provided to councils has helped them in dealing with the impact of Covid-19 in recent months.
"Further funding and financial flexibilities are now needed to help councils meet a shortfall.
"We are pleased that the Government has indicated it is working on a comprehensive plan to address the ongoing financial challenges councils face this financial year as they lead communities through the pandemic.
"We urge the Government to bring forward details of this plan as soon as possible."
England's Minister for Local Government Simon Clarke MP said: “We’re giving councils an unprecedented package of support, including £3.2 billion non-ringfenced emergency funding, to tackle the pressures they have told us they’re facing.
“This is part of a wider package of support from across government for local communities and businesses – totalling over £27 billion - including grants, business rate relief and for local transport.
“We are working on a comprehensive plan to ensure councils’ financial sustainability over the financial year ahead – we will continue to work closely with them to ensure they are managing their costs and we have a collective understanding of the costs they are facing.”
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