Extra £1.5million from Government 'simply not enough' to help South Tyneside Council through crisis

Earlier in July, ministers revealed that a £500million pot would be handed out to local authorities, alongside a scheme to cover the proportion of councils’ lost income.

Last week, it was revealed that South Tyneside would receive £1.5million from this tranche of funding, on top of some £10.3million it received in the previous two rounds.

RELATED: Auditors say South Tyneside Council finances not among the worst

But leader of South Tyneside Council, Cllr Iain Malcolm, has warned the new funding falls short of the amount needed to tackle the pressures of the pandemic.

“We welcome the latest announcement about funding coming forward, however it is simply not enough,” he said.

“It still falls significantly short of the amount we need to address the severe financial pressures incurred because of the pandemic.

“Councils like ours have played, and continue to play, a vital role in the fight against coronavirus and we, along with our partners, have been working around the clock to keep essential frontline services running, to protect our most vulnerable residents, keep our communities safe and support our local businesses.

“We have seen increased spending pressures in areas such as adult social care as well as significant income loss in areas such as leisure centres, all whilst there has been additional demand for our services.

“The increased costs in social care provision in particular have exacerbated an existing crisis and this needs urgent action.”

Cllr Malcolm added: “South Tyneside has already borne the brunt of national budget cuts over the last decade, which meant that even before Covid-19 hit, many of our services were chronically under-funded and overstretched.

“While this additional extra funding is welcome, it is not enough.

“A substantial amount is needed to address the severe financial challenges we face as a result of this crisis and, to enable us to plan properly for the medium term, a much longer term settlement is required.”

South Tyneside Council received £6,171,973 in the first tranche of government Covid-19 funding and a reduced amount of £4,145,513 in the second tranche.

The third tranche of funding takes the Covid-19 financial aid for South Tyneside up to £11,827,864.

South Tyneside Council’s leader has previously said a “substantial amount” of extra cash will be needed to plug spending holes due to Covid-19.

However, finance chiefs added it was ‘too early’ in the financial year to assess the full impact of the virus.

Councils ‘playing vital role’

Local Government Secretary Robert Jenrick said : “Councils are playing a vital role in our national fight against coronavirus, providing a lifeline for so many and supporting communities at a time when they need it most.

“That’s why we are giving them an extra £500million – taking our total additional funding provided to £4.3billion – and now I have set out how this will be allocated to councils fairly based on the pressures they have told us they are facing.

“This comes on top of the co-payment scheme announced [this month] that will compensate councils for irrecoverable income losses from sales, fees and charges.”

This scheme will see the Government cover authorities for 75p in every pound lost, where losses are more than 5% of planned income from sales, fees and charges.

The Local Government Association, which represents councils, described this as ‘a step in the right direction’.

It also repeated its call to the Government to meet all extra cost pressures and income losses from fees and charges and other sources, including commercial activity, in full.

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