Government broken promises over ‘coronavirus black hole’

Croydon North MP Steve Reed OBE has warned the government that local councils across the country face catastrophe due to a £10billion coronavirus “black hole”.

MP Steve Reed: dire warning

Reed, Labour’s front bench spokesman on local government, reckons that councils may need to cut adult social care by £3.5billion, shedding thousands of care workers’ jobs, unless the government makes good on its pledges to meet all of the local authorities’ spending during the covid-19 emergency.

There would also have to be £2billion cuts to children’s social care and £700million cuts from public health budgets, Reed said.

Reed’s analysis is based on 2019-2020 budget estimates, with figures from the Local Government Association, and was contained in a letter sent this morning to Robert Jenrick, the Tory government’s communities minister.

“You publicly promised to fund ‘whatever’s necessary’ to get communities through this crisis,” Reed wrote.

“Not doing so would mean the heroes we all applaud for getting the country through this crisis will lose their jobs and councils will be left without the resources to support local economies through the recovery.”

Broken promise: Robert Jenrick

In his letter, Reed wrote, “Local authorities are the biggest funders of social care in England, so when the government promised to stand behind councils through this crisis, Labour supported them.

“But now ministers are breaking that promise, leaving councils with a £10billion black hole forcing 21 per cent cuts across the board.

“Unless the government drops those plans the frontline heroes we’re cheering today will lose their jobs tomorrow and the equivalent of 225,000 frail and frightened older people and vulnerable adults will lose the support they rely on.

“That would be a catastrophe for social care, disastrous for those who lose support as providers are forced out of business, and would, once again, fail the very people putting their lives on the line to get us through this crisis.”

Data from the Kings Fund and Department for Health and Social Care also show that other key services are also at risk of cuts, including libraries, children’s centres, leisure centres, public parks, road safety, road gritting and street lighting.

Local authorities are more restricted in what they can do with their budgets than central government. Councils are not able to borrow to cover revenue spending, or to run deficits by carrying overspends into subsequent years. If a council fails to balance the budget, a Section 114 notice is issued under the Local Government Act 1998 which prevents any new expenditure and gives a council 21 days to make an alternative budget that fits the criteria.

A budget made after the issue of a Section 114 notice would involve making cuts to existing services. Across the country, several local authorities have said that they are weeks away from issuing a Section 114 notice.

Under the austerity measures implemented by then chancellor Gideon Osborne and the Lib-Con coalition, councils in England have seen government funding cut by £16billion since 2010, resulting in almost 80 per cent reductions for some, including Croydon.

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