Local government finance needs a bigger quantum, finance chief Rob Whiteman told MPs this week.
As the Government is wrangling with how it will split the latest £1.6bn tranche of funding for local authorities to deal with coronavirus, the chief executive of the Chartered Institute of Public Finance and Accountancy warned the autumn budget round would be tough for all councils.
While he said the previous distribution mechanism had ‘not necessarily hit all the right parts’ he told the housing, communities and local government select committee: ‘To change the mechanism of distribution midway through the crisis would be very difficult.
‘We would be better to stick with the method of distribution, accept where it doesn’t work and fill in the gaps.’
But he added: ‘I think the real problem is quantum. Local government will need more quantum and more resource.’
He claimed the fair funding review should be paused while local and central Government deal with the crisis at hand.
His comments come as the County Councils’ Network has called for more clarity on how the funding will be split.
Latest figures from the County Councils’ Network suggest coronavirus is adding an extra £1bn to care costs in the counties. This is on top of the pre-virus funding black hole.
CCN chairman, Cllr David Williams said: ‘If the government changes the distribution of emergency funding it will disproportionately and unfairly impact those councils responsible for adult and children’s social care, reducing the funding available for these vital care services.’
He suggested compensation for loss of income, rather that increased expenditure, should be ‘outside the £1.6bn allocation’ for tackling coronavirus.
He added: ‘There are a number of other measures that ministers could bring forward to provide short-term financial flexibility, such as a relaxation of borrowing rules so councils can borrow to fund revenue spending and a suspension of Section 114 requirements.’