“WITHOUT the funding to meet this gap of £19m, and ultimately fund our frontline services to respond to this crisis, we will not be able to continue to meet the needs of our residents. This gap ultimately threatens the long-term financial sustainability of the Council,” Hackney’s Mayor Philip Glanville has told the Prime Minister in a letter also signed by Deputy Mayor Cllr Rebecca Rennison who takes the finance lead for the Council.
He went on: “While we welcome the additional £1.6bn for councils, announced by the Secretary of State for Local Government on 18th of April, this is not enough to meet the needs of our residents.
“To date, Hackney has benefitted from roughly £17.5 million of additional funding from your government. However, this still leaves us facing a £19 million budget gap just in the first three months of this financial year.
“While I appreciate this is a rapidly developing picture, I also feel that comments made by your Secretary of State for Local Government that our estimates of lost income are “highly speculative” are unwelcome and inaccurate.
“Indeed his comments last week suggesting to Councils …the government had been “very clear” about the “specific tasks it has asked of councils” , risks being disingenuous given only a few weeks before we were being told to spend and do whatever it takes to support our borough and the most vulnerable.
“Indeed that was the implicit and explicit tone of our engagement with the Government, linked to the promise of funding to support these humanitarian endeavours.
“We have worked tirelessly to implement the Government’s directives regarding COVID-19, including the large number from the Ministry of Housing, Communities and Local Government. I am sure that the Secretary of State is aware of this effort and it is my hope that he in turn works to champion the needs of those local authorities working so hard to deliver the Government’s programme of support at this time.”
Mayor Glanville went on: “On Thursday, like you we will be clapping our carers and key workers, it cannot be right that once this crisis is over that their jobs and the services they provide will be at risk.
I ask that your Government agrees to meet the financial needs of local councils and their key workers, and honour the pledge your Secretary of State made to us at the beginning of this crisis: “spend what you need” and that the Government would support us.”
Mayor Glanville emphasised to the Prime Minister: “As I am sure you are aware, alongside the NHS, Councils like Hackney are on the frontline of responding to this crisis. We are leading from the front, working co-operatively with our local communities ─ setting-up volunteer hubs and coordinating with local charities to support our most vulnerable and supply food parcels and other essential supplies beyond the Government’s shielding lists.
We are directly intervening in support of our residents and our local economy, with a package of support measures in response to this crisis.
We have invested £500,000 into the Council’s Discretionary Crisis Support Scheme by repurposing some earmarked reserves which residents can apply to for urgent financial support with emergency needs. A further £120,000 has been invested to support Discretionary Housing Payments for those needing support to pay rent.
We introduced a three-month rent free period for our voluntary and charity organisations renting Council buildings, and a three-month no-quibbles rent deferral for all 300 of our commercial tenants.
We have suspended all commercial waste payments for businesses that have been forced to close and suspended all fees and charges due from street market traders unable to trade. And as of the 7th May, £50.2 million worth of business rate grant payments have been made to 4,654 businesses in Hackney.
We are investing in our frontline services to support our communities. Last month, my Cabinet agreed to earmark an additional £12 million this year for services to be able to continue to respond to the coronavirus crisis, and support our most vulnerable. This funding into adult social care, children’s social care, education and homelessness teams will go directly into making sure we can keep our residents and staff safe.
But to continue to support these services and key workers, so they can keep looking after us, more money than your Government has so far announced is desperately needed.
The financial impact of this crisis on our income will be profound. Hackney Council alone is expecting a £37.2 million reduction in income this financial year due to losing commercial waste income, parking income, commercial rent and the expected loss in Council Tax income, to name just a few.
We would call on you and the Secretary of State to publish the returns from local authorities to MHCLG as we have done and keep doing this as further returns are made.
Over the course of the coming year, the combination of additional costs and lost income that we would normally receive from the services we deliver, leaves a shortfall of £72 million.
To provide a sense of scale, our Revenue Support and Top-up Grant for 2020/21 totals £108m. Over the past decade of austerity we have lost £140 million from our government grant, the equivalent of £529 per person in Hackney.
In the last tranche of emergency funding, we received the equivalent of £28 per head.
We appreciate the theoretical need to share the burden, but it must be based on the needs of our communities, a long term plan to properly fund local government through this crisis and beyond and not a continuation of austerity. We have reserves of £15m and it is our expectation that these will have to be used during this period.
However, as you can see from the figures above, even taking our full reserves and the full Government contribution to date, this takes us less than halfway towards meeting the forecast shortfall.”
12 May 2020