Local councils face a Covid-19 cash crisis – and it’s about to get ugly

The Local Government Association says £6bn is needed just to keep the show on the road as its members prepare emergency budgets after years of neglect, writes James Moore

Northamptonshire County Council had commissioners sent in after a huge overspend emerged (PA)

Local government finance is a bit like a sore tooth. It’s something people typically choose to ignore until they wake up one morning and find themselves in so much pain that they need a shot of morphine and a swift trip to see an emergency dentist for a surgical procedure.

Council taxpayers might be about to find out just how painful that surgery is going to be. Local authorities were in a precarious financial position before the novel coronavirus landed on these shores.

According to the Local Government Association (LGA), the extra Covid-19 costs and losses of income incurred by councils in March, April and May, amounted to £3.2bn in England. This has been covered by two tranches of emergency funding provided by central government. But they could require as much as £6bn more to cover the costs of coping with the coronavirus pandemic through the course of the current financial year.