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Councils confront funding crisis in the face of the Coronavirus.

As the coronavirus sweeps the globe governments are having to step up in order to meet the challenge. Public health concerns have forced them to impose quarantines on their citizens. Those that can work from home have been told to do so and all, but essential business have been instructed to shutter. The effects of quarantine were immediately felt in the economy. For a country like the UK, the economy depends on consumers consuming, whether that’s on the high street, shopping centres or in restaurants. The government, therefore, has had to step in further to assist business, particularly small ones, with schemes such as the Coronavirus Retention Scheme

Now that restrictions are starting to be lifted, and normalcy is returning, the government is beginning to look at the cost of some of the measures that were initiated. Councils across the UK are having to deal with the fallout of the coronavirus and subsequent quarantine. The effects of the quarantine have led to a massive shortfall in funding for councils through decreases in traditional revenue streams such as local taxes and parking collections. For instance, Leeds City Council said it expected to face a budget overspend of almost £200m this year.The County Councils Network (CCN), which acts for 39 of the most prominent English authorities, said that they faced large-scale reductions in services this year unless ministers decide on a long-term contingency strategy. The government has already agreed to provide councils with an extra £3.2 billion in emergency funds to cover the shortfall. However, councils are already saying that it isn’t enough. The Local Government Association has estimated that a further £6bn would be needed to support councils across the country through the financial year.

Councils may be forced to cut local services dramatically to balance their books. This could impact many of their services such as roads, libraries, or school buildings. Cuts in public spending have been shown to have a significant impact on the communities in which they are implemented. Austerity cuts are also deeply unpopular inspiring protests whenever they are utilized. The previous cuts that were implemented after the 2008 recession was particularly brutal. According to the Institute for Public Policy Research,  more than 130,000 deaths in the UK since 2012 could have been prevented if improvements in public health policy had not stalled as a direct result of austerity cuts.

The government will have a choice to make in how it responds to the crisis regarding council funding. Tory governments in the past may have been eager to answer with cuts in times of market downturn, but Boris Johnson has said that he intends to increase public spending. He has shown his resolve on this issue even going as far as to replace Sajid Javid as chancellor because he didn’t agree with his increased public spending pledge. Councils will, therefore, have to wait on Downing Street to find their funding.

By Sakariya Yasin

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