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Wed, 28 October 2020

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Keir Starmer warns councils facing £10bn funding ‘black hole’ amid coronavirus pandemic

Keir Starmer warns councils facing £10bn funding ‘black hole’ amid coronavirus pandemic

The Labour leader said his party would ‘give councillors, communities and people on the front line in our public services a bigger say’.

2 min read

Councils are facing a £10bn funding “black hole” amid the coronavirus crisis, Keir Starmer is set to warn.

The Labour leader will tell the Local Government Association’s annual conference that local authorities are now facing a “perfect storm” as a result of decades of pressure on their funding.

And he will vow to give local government a “much bigger say” over money and investment by replacing the House of Lords with a second chamber “representing the nations and regions of the UK”.

Ministers have vowed to do “whatever is necessary” to help councils through the pandemic, with £3.2bn in funding and extra flexibility from the Treasury over their finances.

But the LGA, which acts as the umbrella group for councils, warned last week that "further funding and financial flexibilities are now needed to help councils".

That came after the Institute for Fiscal Studies think tank said that while deprived areas had been harder hit by the virus because of an increase in demand on services, affluent areas were also suffering a steep drop in income. 

And they urged the Treasury to “consider temporarily relaxing the rules that prevent councils from borrowing to cover day-to-day spending“.

Speaking to the LGA conference, Sir Keir will say there risks being a “black hole of around £10bn” in council finances if the Government does not offer further support.

And he will vow: “A Labour government would win power in order to hand it back to the nations, regions, cities and towns across our country.
 
“We would give local government a much bigger say over investment and services, not through plans devised by someone in an office on Whitehall, but ones created and rooted in communities, so that they truly serve the people.
 
“We would put local government, its power and its innovation, straight at the heart of Westminster by replacing the House of Lords with a democratic second chamber representing the nations and regions of the UK.
 
“And we would give councillors, communities and people on the front line in our public services a bigger say over the decisions that affect them. 
 
“Because at the heart of the broken trust in national politics and politicians is a feeling that we aren’t listening.” 
 

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