Region's councils facing the huge cost of Covid-19

The shocking figure comes from analysis prepared by the 10 unitary authorities in the city-region, of which Wigan is one, and the Greater Manchester Combined Authority (GMCA).

Wigan has received a total of £28.31m for dealing with the coronavirus, including two tranches of funding from the Ministry of Housing, Communities and Local Government (MHCLG) and money to fund a track and trace programme and help control the infection in care homes.

Altogether Greater Manchester has been allocated £244.21m in this process.

This latter figure, though, is only around one-third of the expected total cost of dealing with the virus and the impact the disease has had on the regional economy in 2020-21.

And there are now warnings of a fiscal “black hole” for public services.

David Molyneux, leader of Wigan Council and portfolio lead for resources at the GMCA (right) said: “Local government finances have been under pressure for many years, and what this health pandemic has done is exposed how our public services have been stripped to their bare bones.

“We’ve risen to the challenge to help those who need it, but it’s been at a massive expense.

“The balance sheet of expenditure and losses shows the stark financial toll we’re having to bear.”

The cost of delivering the Covid-19 response in Greater Manchester is around £226m, while the city-region faces a shortfall of £496m in lost revenues.

The 10 councils face an additional £225m in extra costs by the end of 2020-21.

The biggest spend by far will be on adult social care at around £71m, with increased demand for care and support, personal protective equipment (PPE) having to be bought and day support charges being reduced.

An additional £18m will be spent on children’s social care, £13m on education and £33m on housing, highways and public health.

Councils face a drop of £167m, or 42 per cent, in commercial income, with business rates losses expected to be around £69m and the council tax shortfall ending up at around £97m.

Town halls will also lose around £61m by next April in sales, fees and charges.

Dividends from Manchester Airport alone are expected to be down by some £100m this financial year, after flights were grounded by the disease.

Some Greater Manchester councils receive as much as 67 per cent of their income from council tax, compared to an average of around 49 per cent.

GMCA is warning these numbers will severely impact town halls’ ability to build back better after the crisis.

MHCLG has only reduced the funding gap to around £390m, the combined authority said, and councils suffered a hit when the deprivation weighting was removed from the second tranche,

A total of £92m of reserves have been allocated by all 10 councils to help plug some of the funding holes.

However, there is a strong feeling that the government needs to do more.

Mayor of Greater Manchester Andy Burnham said: “Councils have been working wonders to support people and communities through this and now need and deserve the Government’s help.

“Councils will be crucial to the recovery from Covid and getting communities back on their feet, but won’t be able to play that role with a black hole in their finances.

“Without urgent support, this funding crisis will engulf local government and endanger the vital services that councils provide to the community, particularly for the most vulnerable.

“We know this virus has hit the poorest communities hardest. We have also heard the Government’s promises to ‘level up’ the country.

“The time has come to make good on those promises and give Greater Manchester and its councils the resources they need to lead recovery and build back better.”