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NILGA & SOLACE - LG COVID-19 FINANCIAL DEFICITS

CASE FOR COVID-19 FINANCE FOR COUNCILS PUT TO MINISTERS

With around 80% of councils income – some £900 million in total per annum across local government - coming from a combination of domestic rates, income generated from leisure and wellbeing services, regulatory and statutory fees, off street car parking, local tourism, events, arts, together with sports and community facilities, a financial black hole has opened for all 11 local authorities.

Council services – both statutory and discretionary – are costed in such a way as to be affordable to ratepayers and to recover costs. The income sustains essential services from waste collection and recycling to planning, from preventative health programmes to celebrating and supporting local communities, artists and businesses, together with those in greatest need in our community. Therefore, no income, reduced income or deferred income means services cannot be run – impacting the whole of society.

It is absolutely imperative that the Executive in Stormont ensures national government and NI regional departments offer financial support directly to councils, mirroring the actions already taken in England, Scotland and Wales. To give examples, as part of the Budget, the government committed to providing Local Authorities in England and Wales with £500 million to support economically vulnerable individuals and households. £1.6 billion will go to the same local authorities to help them respond to other coronavirus (COVID-19) pressures across all the services they deliver, including those run by our councils here

Regionally, councils across the English Midlands received almost £85 million in new funding to help tackle the coronavirus crisis. Around £64m of the government funding will help local authorities respond to pressures across the services they deliver, such as planning and bin collections, while £20.7m is from a hardship fund to provide council tax relief – the equivalent of rates bills - to vulnerable people and households. This means any non-payments of rates due to exceptional circumstances will be offset, maintaining the income through an exceptional grant fund.

In Scotland, a first stage emergency funding package has been allocated Scotland to the 32 councils, some £95 million direct to local authorities made up of £50 million in Barnett consequentials from the UK Government’s hardship fund given direct to local authorities to support their own local resilience, support and hardship plans and £45 million added to Community Grants and Crisis Grants available to those in immediate need. This is a doubling of funds for programmes in the community administered by local authorities, sent straight from Holyrood.

A particular concern right now for councils in Northern Ireland is the additional cost of waste disposal (estimated at £30m across the 11 councils) during the COVID-19 pandemic. There will be an increase in household waste, with the majority of people staying at home for what is likely to be a long period, during which time our usual recycling practices may not be possible, or even desirable. Whereas councils across the water can dispose of ‘grey bin’ waste using energy from waste plants, this doesn’t happen here - all we can do is landfill it in view of closure of other disposal options including waste exporting. Some of the cost of disposal will be burdened by councils in terms of technical work, together with the expensive landfill tax which goes to Treasury.

Stormont must join NILGA and press for a temporary relaxation of this tax, saving councils huge payments by so doing.

Additionally, councils expect to draft in additional collection staff from outside local government to cover sickness absence, and such costs are being met by funding for councils across the water.

The sustainability of local government is in jeopardy, something that must be tackled now, head on. Proportionate cash grants from the hardship funding received from national government and other financial measures such as deferred loan payments should be given straight to councils in the same flexible and immediate fashion as is the case everywhere else. Whilst the range of services provided by our 11 district councils is more limited than their British counterparts, nonetheless, the essential services our councils provide will maintain public health, foster social cohesion, keep the economy working, provide local facilities for alternate medical and emergency use - in other words keep communities sustainable now and beyond Covid-19, when recovery will require a massive locally co-ordinated effort.

NILGA and councils are aware of the huge importance of partnership working and sacrifice at this time, and at all times. Testimony to this is the co-ordination work of council Chief Executives, now included in the Economy Minister’s Forum. We will engage with - and have objectively informed Ministers in all key departments and will continue to do so with the community and its safety the driving force. This engagement has included Finance Minister Conor Murphy MLA, who has just delivered a hugely important Covod-19 driven budget, with contingency funding for more on the ground support, which councils could benefit from, as they deliver more “local hub” actions with community and government partners.

NILGA’s diligent work and similar regional actions by SOLACE links both tiers of government politically and operationally and this is happening right now on Covid-19 related workforce, legislative, funding, planning, waste management and other crucial issues.

But the Association is deeply concerned – based on real evidence – that for local government to be sustainable and deliver for our communities, now and post Covid-19, the Stormont Executive needs to factor councils into its financial support package - without delay. 

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