Lambeth council says it faces a £28m budget gap that threatens local recovery because central government is failing to fund local authorities fully for their work to support residents during the pandemic.
The council said it has redirected staff and resources across its services and invested additional resources in care homes, provided PPE, distributed millions of pounds to keep businesses going, and delivered more than 20,000 food packages to vulnerable people.
It said that extra spending, combined with a huge fall in income from parking, business rates and council tax, risks a major budget gap.
Central government initially promised councils that they would be fully reimbursed for all Covid-19 related costs, but Lambeth council has received only £19 million of additional funding against a total funding gap of £47m.
The announcement by housing, communities and local government secretary Robert Jenrick of a further £500m for all local authorities is likely to cover only a fraction of Lambeth’s budget gap, the council said.
London Councils, which represents all 32 Greater London boroughs, estimates that they face a budget gap of £1.4 billion this financial year. It said government announcements had been “wholly inadequate”.
Maria Kay, Lambeth council’s cabinet member for finance and performance, said: “Robert Jenrick’s much-hyped announcement is once again little more than a sticking plaster for the challenges councils face. Instead of piecemeal announcements that provide a fraction of what local services need, the government should stick to their original pledge to fund councils to do whatever it takes to tackle Covid-19.
“To leave local councils to bear the burden of this national crisis would be profoundly unfair – and would restrict our ability to support a sustainable and equal recovery for all residents.”
Council leader Jack Hopkins wrote to the prime minister in April to stress the need for vital local services to be fully funded so that residents could be kept safe during lockdown.
Lambeth’s council’s cabinet will consider the financial situation and plans to support the recovery when it meets later this month.