Islington leader Richard Watts warns councils will fold unless government steps in with more coronavirus funding
PUBLISHED: 13:56 24 June 2020
The leader of Islington Council has warned government ministers that local authorities will start going bankrupt unless they take swift action with financial aid.
Richard Watts said he had “issued another warning to ministers that local councils will start to go bankrupt unless they act very quickly”, on a public Facebook live session online.
He added: “Islington, because of our good financial management, is not going to be front of the councils that go bankrupt. “We do have reserves and we can manage this crisis for another few months. But if the government doesn’t step in it is going to be incredibly difficult. “It would be appalling if we have to manage more cuts, particularly since the Prime Minister has said he doesn’t believe in another found of austerity but frankly if the local authority doesn’t get more money from government, it is another round of austerity we are heading towards. People rightly have expectations of Islington to step in when there are problems, but we have a problem, I want to be frank about the council’s finances.
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“We have a massive financial crisis caused by the Covid crisis.”
He accused the government of reneging on promises to provide more funding, in wake of the coronavirus pandemic, which means Islington is now facing a £136 million funding gap in 2020/21, despite careful financial management which led to an £8 million underspend in the last financial year.
Government grants to deal with increased costs of the pandemic total almost £16 million.
A spokesperson for the Ministry of Housing, Communities and Local Government said it has already given councils an “unprecedented package of support”, which includes £3.2 billion emergency funding.
“In total the government has provided over £27 billion to support local councils, businesses and communities in fighting the pandemic, including £600 million to help reduce the infection rate in care homes and £300 million to support track and trace,” they added.
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