Coronavirus: UK councils fear bankruptcy amid Covid-19 costs
The challenges inherent in this story speak for themselves – with a number of particularly rural first tier authorities potentially high on the list.
Nearly 150 authorities have forecast a combined budget shortfall of at least £3.2bn, the BBC found.
Labour leader Sir Keir Starmer has said the government “has got to recognise” the financial situation facing councils.
The government said it was working on a “comprehensive plan” for councils.
A BBC investigation found across the UK:
- At least five English councils warned they may meet the criteria to issue a section 114 notice at some point without more government support, declaring themselves effectively bankrupt
- They include some of the UK’s largest unitary authorities – Leeds, Wiltshire, Trafford, Tameside and Barnet
- Of 173 local authorities who responded to the BBC’s questions, 148 predicted a budget shortfall
At least 20 local authorities plan to hold an emergency or in-year budget
Lost business rates, council tax holidays and emergency payments for families whose incomes have disappeared have all hit upper tier councils’ income, at the same time as rising costs of adult care and providing protective equipment (PPE) for carers.
Some of those councils would also typically depend on tourism for large chunks of income, such as dividends from airports they own or parking fees from visitors.