Councils’ outgoings are rocketing and revenues collapsing

Basic information
Date of placement
46
0
0

The crisis is hitting councils every which way

Britain | The Economist

Editor’s note: The Economist is making some of its most important coverage of the covid-19 pandemic freely available to readers of The Economist Today, our daily newsletter. To receive it, register here. For our coronavirus tracker and more coverage, see our hub

IN MAY THE Roman plunge pools and saunas in Bath (or Aquae Sulis, as the builders called it) usually throng with tourists and history buffs. But for six weeks they have stood empty, thanks to covid-19. The tour guides have been redeployed by their employer, Bath and North East Somerset Council, to administer emergency grants for local traders. The baths, along with the city’s art gallery and museum, ought to have pulled in £9.6m ($11.9m) this year, mostly over the summer season. Now the council predicts a shortfall of £40m in its annual budget of £120m. The gloom may last two or three years if the tourists stay away, says Will Godfrey, its chief executive.

Britain’s town halls are doing the heavy lifting of fighting the pandemic. They fund care homes, deliver food parcels and bury the dead. They are finding hotels for rough sleepers and refuges for victims of domestic violence. Spending is up, because social distancing and sickness means employing more care staff. Mr Godfrey expects to spend £500,000 a week on protective kit.

At the same time, revenues are down sharply. There is little demand for car parks, swimming pools or school dinners. Bath forecasts a 10% fall in council-tax receipts if hard-up families fail to pay bills. Bradford Council, which runs four theatres, had expected £4.5m in ticket sales on a production of “The Lion King”, a musical, which had been due to open on April 30th.

Robert Jenrick, the communities secretary, has announced a £3.2bn bailout for English councils as well as measures to relieve cashflow. But the Local Government Association, a representative body, says three to four times that sum may be needed. Bath’s share is £10m.

The impact is exacerbated by big changes to council financing over the last decade. Since 2010 successive national governments have cut grants sharply, forcing councils to look elsewhere for income. Some turned to property. Local authorities invested £6.6bn in commercial property in the three years to 2019, a 14-fold increase on the previous period. That poses risks if asset values and rents fall, the National Audit Office warned in February. The Treasury plans to curtail cheap lending for investment in shopping centres and cinemas.

Warrington Borough Council is one of a number of big spenders, with a £700m portfolio of offices, supermarkets and distribution centres. Covid-19 is forecast to leave the council with a deficit of £35m to its £143m budget. Steven Broomhead, its chief executive, worries that rental income may fall behind borrowing costs.

Since 2013 councils have been allowed to keep at least half the business-property taxes raised locally, and since 2011, to earn bonuses for building new houses. That will leave them exposed if businesses fail to pay and housebuilding dries up. Rural councils are particularly vulnerable because of their reliance on income from parking, leisure and waste, according to research by the Institute for Fiscal Studies, a think-tank.

By law, councils must run balanced budgets. Those that do not must declare de facto bankruptcy and freeze non-essential spending. That is rare in normal times but risks becoming more common without more support from Mr Jenrick. It may be the fate of Bradford Council, which forecasts a £60m deficit this year, of which only half will be covered by the bailout. “We are really, really stuck,” says Chris Chapman, the finance director. “What services can we feasibly cut?”

Dig deeper:
For our latest coverage of the covid-19 pandemic, register for The Economist Today, our daily newsletter, or visit our coronavirus tracker and story hub

This article appeared in the Britain section of the print edition under the headline "Sinking"

Reuse this contentThe Trust Project

(0)
0.0
Dislike 0
ОТН 0
Like 0

News list


15:50 Home prices in NL to increase 4% this year: ABN Amro
15:43 ‘Artefact detectives’ in Iraq aim to end the theft of their history
15:39 Archaeologists & filmmakers dig up the past of UAE’s Shamash temple
15:30 Moderation
15:05 [Ticker] Sweden halts Iran Air flights after crash
15:01 Middle East crisis: EU's delicate balancing act between Washington and Tehran
15:00 Dutch soldiers in Iraq safe, together, Defense Min. says
14:59 Outrage over reports EU-funding linked to forced labour in Eritrea
14:45 Meeting between the College of Commissioners and the Members of the Parliamentary Groups
14:33 [Ticker] Spanish court: EP must end Catalan MEP immunity
14:10 Boy, 10, randomly assaulted by woman on Haarlem street
14:01 Dutch cabinet now in favor of new fireworks limits and regulations
14:00 Girls more likely to be harassed, stalked online
13:51 2nd EU Clean Air Forum (Bratislava, 28-29 November 2019) - Part 2/3
13:49 [Ticker] Orban to offer free IVF in anti-immigrant move
13:27 Hate speech has 'no place' in Austria, says Kurz, after Bosnian-born minister receives abuse
13:20 Dutch car rolls in Belgium; deceased victims discovered hours later
13:00 Trump proposes 'NATOME': NATO expanded to MidEast
12:35 Lack of career prospects leaves care workers to quit, says report
12:35 Singer songwriter Jeangu Macrooy is Dutch Eurovision entry- AD
12:35 Defrosted kingfisher rejoins museum collection of dead animals
12:35 Saba again present at Holiday Fair - Saba News
12:35 Politicians should take responsibility for their own laws, says legal chief
12:35 ChristenUnie calls for firework clubs, backs ban on consumer sales
12:35 Good weather will bring clear views of partial lunar eclipse
12:35 'Explosive' growth in Amsterdam hotels despite stricter limits
12:35 More violent incidents at New Year, but fewer people are arrested
12:30 Number of hotels in Amsterdam region skyrocketing: report
12:05 [Ticker] Von der Leyen: 'Influential' EU means talk and trade
12:00 Pope Francis: "US-Iran tensions threaten rebuilding of Iraq"
11:40 More than 9,300 incidents over New Year's: police
11:30 Friends of plane crash victims mourn loss
11:21 EC Midday press briefing of 10/01/2020
11:20 2nd EU Clean Air Forum (Bratislava, 28-29 November 2019) - Part 1/3
11:18 Croatian Presidency of EU Council: press conference opening remarks by President von der Leyen
11:15 Croatian Presidency of EU Council: opening remarks by Croatian Prime Minister and President of EC
11:00 DUTCH RAILROAD CROSSING - Geldermalsen - Voetakkerweg
11:00 DUTCH RAILROAD CROSSING - Prinsenbeek - Spoorstraat
10:50 Girl, 10, dies after falling from asylum center's window
10:43 Compilatie 24H ‘Ontdek je stad’ 2019
10:32 Ontdek Amerfoort #Citytrip
10:26 UK accused of 'behaving like cowboys' over EU database copying
10:26 Men in west London have highest male life expectancy in EU - Life expectancy
10:24 Ursula Von Der Leyen and Croatian PM Andrej Plenkovic talk to the press | LIVE
10:00 Car with possible explosives found in Gelderland town; link with ATM bombing investigated
09:40 Viktor Orbán threatens new Europe grouping to rival 'weaker' EPP
09:39 Stockpiling for the New Year
09:37 European ministers meet to salvage Iran nuclear deal
09:35 President von der Leyen meets with Andrej Plenkovic, Croatian Prime Minister
09:30 Dutch Listening Practice - Talking About a School Trip in the Netherlands
09:28 [Ticker] Johnson suggests Iran crash was 'unintentional' missile
09:22 In Myanmar Armys Corner, Aung San Suu Kyi Will Defend It in Rohingya Genocide Case
09:16 Trudeau: Canadians deserve answers on plane crash
09:10 Man, 68, arrested for taping jerry can to Leeuwarden train
09:09 Iran denies that it brought down Ukrainian plane with a missile
08:49 Ask Our Astronaut | What's next in space exploration?
08:18 8 teams who saw their seasons ruined by international breaks
08:17 Judiciary Council calls politicians to stop blaming judges for unpleasant rulings
07:45 Iranian missile caused crash of Ukrainian Boeing 737: Officials
07:39 House of Commons passes Brexit bill for UK departure from EU on January 31
07:37 Gay, bisexual young people over twice as likely to be harassed, stalked online
07:01 Canadian PM called PM Rutte about MH17 after Tehran plane crash
06:37 Only let specialized clubs light fireworks, coalition party says
06:27 [Ticker] Swiss afraid of EU wage dumping
06:25 [Ticker] Orban to start new EU movement if kicked out of EPP
06:24 [Ticker] EU blasts Israeli settlements on 'occupied' land
06:15 Croatian PM Optimistic About EU Talks For North Macedonia, Albania
06:10 ABN Amro names PwC's former Dutch chairman as new CEO
06:07 South Mississippi Strong- Mag Holland is an angel devoted to helping others
06:04 MEPs slam UK for violating EU police database
06:03 EU regions: don’t touch cohesion funds for Green Deal
06:02 [Opinion] Europe, Scotland and Brexit - what next?
06:02 [Ticker] Brexit back on EU presidency agenda next week
06:01 [Ticker] President of European Court of Justice lambasts Poland
06:01 [Ticker] Athens asks for US help in east Mediterranean
06:01 [Ticker] Ukraine investigators want to search Iran plane crash site
04:32 How polluted is the air where you live?
04:14 Poisonous caterpillar to strike earlier than usual this year

11:18 Croatian Presidency of EU Council: press conference opening remarks by President von der Leyen
10:50 Girl, 10, dies after falling from asylum center's window
10:43 Compilatie 24H ‘Ontdek je stad’ 2019
09:35 President von der Leyen meets with Andrej Plenkovic, Croatian Prime Minister
09:28 [Ticker] Johnson suggests Iran crash was 'unintentional' missile
07:45 Iranian missile caused crash of Ukrainian Boeing 737: Officials
07:37 Gay, bisexual young people over twice as likely to be harassed, stalked online
06:24 [Ticker] EU blasts Israeli settlements on 'occupied' land
04:14 Poisonous caterpillar to strike earlier than usual this year
14:10 Boy, 10, randomly assaulted by woman on Haarlem street
13:51 2nd EU Clean Air Forum (Bratislava, 28-29 November 2019) - Part 2/3
13:20 Dutch car rolls in Belgium; deceased victims discovered hours later
11:40 More than 9,300 incidents over New Year's: police
11:20 2nd EU Clean Air Forum (Bratislava, 28-29 November 2019) - Part 1/3
10:32 Ontdek Amerfoort #Citytrip
09:40 Viktor Orbán threatens new Europe grouping to rival 'weaker' EPP
09:16 Trudeau: Canadians deserve answers on plane crash
09:10 Man, 68, arrested for taping jerry can to Leeuwarden train
09:09 Iran denies that it brought down Ukrainian plane with a missile
07:01 Canadian PM called PM Rutte about MH17 after Tehran plane crash
06:37 Only let specialized clubs light fireworks, coalition party says
06:15 Croatian PM Optimistic About EU Talks For North Macedonia, Albania
06:01 [Ticker] President of European Court of Justice lambasts Poland
06:01 [Ticker] Ukraine investigators want to search Iran plane crash site
15:50 Home prices in NL to increase 4% this year: ABN Amro
15:43 ‘Artefact detectives’ in Iraq aim to end the theft of their history
15:39 Archaeologists & filmmakers dig up the past of UAE’s Shamash temple
15:30 Moderation
15:05 [Ticker] Sweden halts Iran Air flights after crash
15:01 Middle East crisis: EU's delicate balancing act between Washington and Tehran
15:00 Dutch soldiers in Iraq safe, together, Defense Min. says
14:59 Outrage over reports EU-funding linked to forced labour in Eritrea
14:45 Meeting between the College of Commissioners and the Members of the Parliamentary Groups
14:33 [Ticker] Spanish court: EP must end Catalan MEP immunity
14:01 Dutch cabinet now in favor of new fireworks limits and regulations
14:00 Girls more likely to be harassed, stalked online
13:49 [Ticker] Orban to offer free IVF in anti-immigrant move
13:27 Hate speech has 'no place' in Austria, says Kurz, after Bosnian-born minister receives abuse
13:00 Trump proposes 'NATOME': NATO expanded to MidEast
12:35 Lack of career prospects leaves care workers to quit, says report
12:35 Singer songwriter Jeangu Macrooy is Dutch Eurovision entry- AD
12:35 Defrosted kingfisher rejoins museum collection of dead animals
12:35 Saba again present at Holiday Fair - Saba News
12:35 Politicians should take responsibility for their own laws, says legal chief
12:35 ChristenUnie calls for firework clubs, backs ban on consumer sales
12:35 Good weather will bring clear views of partial lunar eclipse
12:35 'Explosive' growth in Amsterdam hotels despite stricter limits
12:35 More violent incidents at New Year, but fewer people are arrested
12:30 Number of hotels in Amsterdam region skyrocketing: report
12:05 [Ticker] Von der Leyen: 'Influential' EU means talk and trade
12:00 Pope Francis: "US-Iran tensions threaten rebuilding of Iraq"
11:30 Friends of plane crash victims mourn loss
11:21 EC Midday press briefing of 10/01/2020
11:15 Croatian Presidency of EU Council: opening remarks by Croatian Prime Minister and President of EC
11:00 DUTCH RAILROAD CROSSING - Geldermalsen - Voetakkerweg
11:00 DUTCH RAILROAD CROSSING - Prinsenbeek - Spoorstraat
10:26 UK accused of 'behaving like cowboys' over EU database copying
10:26 Men in west London have highest male life expectancy in EU - Life expectancy
10:24 Ursula Von Der Leyen and Croatian PM Andrej Plenkovic talk to the press | LIVE
10:00 Car with possible explosives found in Gelderland town; link with ATM bombing investigated
09:39 Stockpiling for the New Year
09:37 European ministers meet to salvage Iran nuclear deal
09:30 Dutch Listening Practice - Talking About a School Trip in the Netherlands
09:22 In Myanmar Armys Corner, Aung San Suu Kyi Will Defend It in Rohingya Genocide Case
08:49 Ask Our Astronaut | What's next in space exploration?
08:18 8 teams who saw their seasons ruined by international breaks
08:17 Judiciary Council calls politicians to stop blaming judges for unpleasant rulings
07:39 House of Commons passes Brexit bill for UK departure from EU on January 31
06:27 [Ticker] Swiss afraid of EU wage dumping
06:25 [Ticker] Orban to start new EU movement if kicked out of EPP
06:10 ABN Amro names PwC's former Dutch chairman as new CEO
06:07 South Mississippi Strong- Mag Holland is an angel devoted to helping others
06:04 MEPs slam UK for violating EU police database
06:03 EU regions: don’t touch cohesion funds for Green Deal
06:02 [Opinion] Europe, Scotland and Brexit - what next?
06:02 [Ticker] Brexit back on EU presidency agenda next week
06:01 [Ticker] Athens asks for US help in east Mediterranean
04:32 How polluted is the air where you live?

15:50 Home prices in NL to increase 4% this year: ABN Amro
15:43 ‘Artefact detectives’ in Iraq aim to end the theft of their history
15:39 Archaeologists & filmmakers dig up the past of UAE’s Shamash temple
15:30 Moderation
15:05 [Ticker] Sweden halts Iran Air flights after crash
15:01 Middle East crisis: EU's delicate balancing act between Washington and Tehran
15:00 Dutch soldiers in Iraq safe, together, Defense Min. says
14:59 Outrage over reports EU-funding linked to forced labour in Eritrea
14:45 Meeting between the College of Commissioners and the Members of the Parliamentary Groups
14:33 [Ticker] Spanish court: EP must end Catalan MEP immunity
14:10 Boy, 10, randomly assaulted by woman on Haarlem street
14:01 Dutch cabinet now in favor of new fireworks limits and regulations
14:00 Girls more likely to be harassed, stalked online
13:51 2nd EU Clean Air Forum (Bratislava, 28-29 November 2019) - Part 2/3
13:49 [Ticker] Orban to offer free IVF in anti-immigrant move
13:27 Hate speech has 'no place' in Austria, says Kurz, after Bosnian-born minister receives abuse
13:20 Dutch car rolls in Belgium; deceased victims discovered hours later
13:00 Trump proposes 'NATOME': NATO expanded to MidEast
12:35 Lack of career prospects leaves care workers to quit, says report
12:35 Singer songwriter Jeangu Macrooy is Dutch Eurovision entry- AD
12:35 Defrosted kingfisher rejoins museum collection of dead animals
12:35 Saba again present at Holiday Fair - Saba News
12:35 Politicians should take responsibility for their own laws, says legal chief
12:35 ChristenUnie calls for firework clubs, backs ban on consumer sales
12:35 Good weather will bring clear views of partial lunar eclipse
12:35 'Explosive' growth in Amsterdam hotels despite stricter limits
12:35 More violent incidents at New Year, but fewer people are arrested
12:30 Number of hotels in Amsterdam region skyrocketing: report
12:05 [Ticker] Von der Leyen: 'Influential' EU means talk and trade
12:00 Pope Francis: "US-Iran tensions threaten rebuilding of Iraq"
11:40 More than 9,300 incidents over New Year's: police
11:30 Friends of plane crash victims mourn loss
11:21 EC Midday press briefing of 10/01/2020
11:20 2nd EU Clean Air Forum (Bratislava, 28-29 November 2019) - Part 1/3
11:18 Croatian Presidency of EU Council: press conference opening remarks by President von der Leyen
11:15 Croatian Presidency of EU Council: opening remarks by Croatian Prime Minister and President of EC
11:00 DUTCH RAILROAD CROSSING - Geldermalsen - Voetakkerweg
11:00 DUTCH RAILROAD CROSSING - Prinsenbeek - Spoorstraat
10:50 Girl, 10, dies after falling from asylum center's window
10:43 Compilatie 24H ‘Ontdek je stad’ 2019
10:32 Ontdek Amerfoort #Citytrip
10:26 UK accused of 'behaving like cowboys' over EU database copying
10:26 Men in west London have highest male life expectancy in EU - Life expectancy
10:24 Ursula Von Der Leyen and Croatian PM Andrej Plenkovic talk to the press | LIVE
10:00 Car with possible explosives found in Gelderland town; link with ATM bombing investigated
09:40 Viktor Orbán threatens new Europe grouping to rival 'weaker' EPP
09:39 Stockpiling for the New Year
09:37 European ministers meet to salvage Iran nuclear deal
09:35 President von der Leyen meets with Andrej Plenkovic, Croatian Prime Minister
09:30 Dutch Listening Practice - Talking About a School Trip in the Netherlands
09:28 [Ticker] Johnson suggests Iran crash was 'unintentional' missile
09:22 In Myanmar Armys Corner, Aung San Suu Kyi Will Defend It in Rohingya Genocide Case
09:16 Trudeau: Canadians deserve answers on plane crash
09:10 Man, 68, arrested for taping jerry can to Leeuwarden train
09:09 Iran denies that it brought down Ukrainian plane with a missile
08:49 Ask Our Astronaut | What's next in space exploration?
08:18 8 teams who saw their seasons ruined by international breaks
08:17 Judiciary Council calls politicians to stop blaming judges for unpleasant rulings
07:45 Iranian missile caused crash of Ukrainian Boeing 737: Officials
07:39 House of Commons passes Brexit bill for UK departure from EU on January 31
07:37 Gay, bisexual young people over twice as likely to be harassed, stalked online
07:01 Canadian PM called PM Rutte about MH17 after Tehran plane crash
06:37 Only let specialized clubs light fireworks, coalition party says
06:27 [Ticker] Swiss afraid of EU wage dumping
06:25 [Ticker] Orban to start new EU movement if kicked out of EPP
06:24 [Ticker] EU blasts Israeli settlements on 'occupied' land
06:15 Croatian PM Optimistic About EU Talks For North Macedonia, Albania
06:10 ABN Amro names PwC's former Dutch chairman as new CEO
06:07 South Mississippi Strong- Mag Holland is an angel devoted to helping others
06:04 MEPs slam UK for violating EU police database
06:03 EU regions: don’t touch cohesion funds for Green Deal
06:02 [Opinion] Europe, Scotland and Brexit - what next?
06:02 [Ticker] Brexit back on EU presidency agenda next week
06:01 [Ticker] President of European Court of Justice lambasts Poland
06:01 [Ticker] Athens asks for US help in east Mediterranean
06:01 [Ticker] Ukraine investigators want to search Iran plane crash site
04:32 How polluted is the air where you live?
04:14 Poisonous caterpillar to strike earlier than usual this year
I agree and close
x Cookies text