Wigan Council leader's fears over Government's Covid funding cuts and a £20m town hall deficit

Local authorities across the country are said to be facing significant shortfalls, posing a threat to the delivery of services in some areas, as a result of the unprecedented situation.

Wigan Council received around £10.4m in a first round of allocations from central government but that has been reduced by 14 per cent – to around £9m – in the latest funding package.

Recent forecasts suggest the coronavirus pandemic could cost the town hall in excess of £40m, meaning a £20m deficit.

This is primarily due to a reduction in income from payments of business rates, council tax, rents and commercial fees.

Leader of Wigan Council David Molyneux said: “We are all facing unprecedented challenges to help deliver vital public services for all of our residents.

“The estimated shortfalls because of COVID-19 come against a backdrop of us having to cut £160m from our budget over the last decade.

“This continued financial pressure is not sustainable. We will be adding our voice to the growing calls for further support as the current package is insufficient and does not cover the costs associated with COVID-19.”

The government has pledged £3.2bn for local government but recent financial surveys have suggested as much as £10bn may be required.

Councils are having to spend millions more than expected during the COVID-19 pandemic to support residents and keep services running while coping with the impact of lost income.

Coun Molyneux added: “Through the success of The Deal and prudent financial planning we have been able to change the way we deliver services for the better while mitigating the impact of huge budget cuts.

“But we continue to face significant financial pressures without factoring in the impact of COVID-19. This is a scenario we have not been able to plan for and one that we do not know when it will end.

“Other authorities find themselves on the verge of issuing section 114 notices, which effectively means they are insolvent.

“I would urge the government to engage further with local authorities about the scale of the situation we find ourselves in."

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