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Local Government Finance: Coronavirus

Question for Ministry of Housing, Communities and Local Government

UIN 3006, tabled on 18 May 2021

To ask the Secretary of State for Housing, Communities and Local Government, what estimate he has made of the number of local authorities that have had to use reserves to balance their budgets as a result of the covid-19 outbreak; and what steps his Department is taking to help those local authorities replenish their reserves.

Answered on

24 May 2021

The Government allocated over £9 billion directly to councils in 2020-21 for COVID-19-related expenditure and income pressures. At the Spending Review the Chancellor announced that local authorities will receive over £3 billion of additional support for COVID-19 in 2021-22. This includes a further £1.55 billion of grant funding to meet additional service pressures which has now been paid to authorities. ​This takes the total support committed to councils in England to tackle the impacts of COVID-19 to over £12 billion. ​

As part of our support package, councils also have access to a compensation scheme for lost income from sales, fees and charges, which has been extended to June 2021, through which the Government will support local councils with 75% of losses beyond the first 5% of losses. ​

We are aware that a number of local authorities have used reserves to balance their budgets as a result of the emergency circumstances of the COVID-19 outbreak. Official statistics on reserves used during the pandemic are not yet available, though will be published in due course. We would ask that any local authority that is faced with an unmanageable pressure or is concerned about its future financial position should approach MHCLG for discussion.

Named day
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