PARLIAMENTARY DEBATE
Covid-19: Local Authorities and Devolved Administrations - 18 May 2020 (Commons/Commons Chamber)

We have announced £3.2 billion of new funding for councils, alongside the £3.4 billion of further support with cash flow. I am in regular contact with Ministers in the relevant Department on further support.

I welcome the Treasury’s unprecedented package of support, including the provision of grants, which are benefiting many of the smallest businesses right across Bishop Auckland, but many small businesses in my constituency and others do not pay business rates because they are in shared spaces. What steps is the Treasury taking to make these grants more readily available?

My hon. Friend raises an important point, which is why we have allocated a further £617 million of support to local authorities for discretionary payments for cases such as the one that she highlights. Local authorities are free to focus those payments in line with local need.

District councils are the level of local government closest to residents, and I know that they very much appreciated the support that the Government have provided, but responding to the virus has incurred both additional expenditure and a loss of revenue—they have had less income from things such as car parking and leisure services. How can the Minister ensure that district councils are able not only to meet their short-term demands, but to ensure a long-term, sustainable future?

My hon. Friend is right to point to the particular pressures on lower-tier councils, which is why councils such as Rugby have benefited from more than £1 million of additional funding. Seventy per cent of district councils have received more than £1 million, which is why the profile for the second allocation of £1.6 billion was changed to recognise the points that he highlights.

I pay tribute to the Chancellor and to the Chief Secretary for their approach. They will appreciate that the sums involved are staggering, but obviously necessary at this time. Does my right hon. Friend recognise that this is an occasion where we appreciate the strength of the Union—the financial muscle to protect economies and communities in all parts of the UK? Has the Chancellor calculated whether individual nations could have acted independently and, if so, what impact has the collapse in the recent oil price had on that assessment?

My right hon. Friend is absolutely right. That is why £7 billion has been allocated through the Barnett consequentials, including £2.1 billion of additional funding to the Welsh Government. That, of course, sits alongside the UK-wide measures, such as the furlough scheme or the self-employed income support scheme that the Chancellor has announced.

In Bristol, that current funding gap is £82.4 million as a result of the current crisis. Will the Treasury consider allowing local authorities to retain all surpluses against the business support grants so that they can be reinvested into local short-term interventions to get us through this crisis?

What we have seen through this crisis is an unprecedented level of support, including the £3.2 billion that has been announced and the further £600 million of support specifically targeted at the care home sector. That sits alongside earlier funding, including the estimated 4.3% real-terms increase that councils received this year.

The hon. Gentleman is right to highlight the importance of that sector. It is why the initial £1.6 billion funding announced in March was not ring-fenced. It sits alongside the £600 million announced last week. In addition, there is money to help with cash flow, including the £850 million targeted at adult social care, which was paid in one go in April.