By Grainne Cuff, BBC Local Government Reporter
Concerns were raised about the state of Lewisham council’s finances in the wake of Covid-19 at a mayor and cabinet meeting on Wednesday (May 13).
The council estimates a £25 million deficit in the budget as a result of the crisis.
The Government initially promised to cover councils’ costs for tackling the pandemic, but has recently appeared to backtrack.
Councillor Chris Barnham, cabinet member for school performance and children’s services, raised the concerns during the meeting, which was focused on a report discussing the response to Covid-19 and recovery plan for businesses and residents.
He said: “I’m quite concerned about the financial cost – we’ve had to do this, it’s the right thing to do – but it worries me.
“I naively thought that when the Local Government Secretary said to council leaders on March 16 ‘the Government stands ready to do whatever is necessary to support councils in their response to coronavirus’ […] that meant that whatever we did would be supported and I’m quite concerned to hear that the Government seems to be backing away.
“I wonder what we and others might be able to do to encourage them to live up to their bold promises on March 16 […]”
A spokesperson for the Treasury said the Government is not commenting on speculation about future costs.
He said: “As the Chancellor has said, ‘it’s too early to speculate on these things… but what we do know is that we’re facing a time of unprecedented economic uncertainty’.
“What’s clear is that if we had not acted in the way that we did at the scale and speed that we did, the situation would be far worse.
“That’s something that the OBR and the Bank of England have both confirmed.”
Cllr Joe Dromey, cabinet member for culture, jobs and skills, who presented the recovery plan report, praised the Chancellor for the coronavirus job retention scheme and the self-employment income support scheme.
But he said: “There’s a big contrast between genuinely doing what it takes to protect jobs and incomes on the one hand, and the continuation of the starvation of local government.
“We already went into this crisis with a tenuous financial situation after a decade of cuts, and we were initially given hope that the Government would do whatever it takes to support us – that seems to have been withdrawn recently.
“We’ve got reserves, and those are here for a rainy day, and we are going to do whatever we can to support businesses and residents.
“But we know that we will see local government pushed very close to the edge by this crisis.”
Cllr Dromey said councils need to “stand together” to get the funding.
He added that Mayor Damien Egan had been working with the borough’s MPs to push the Government for financial support.
Mayor and cabinet approved the recovery plan during meeting, which sets out the steps the council is taking to support businesses and residents through the initial three months of the coronavirus crisis.
Cllr Dromey said the coronavirus crisis was “first and foremost a public health emergency” but also an “emerging and very severe economic crisis”.
“The lockdown that has been absolutely vital in slowing the spread of the virus but is having a very severe impact on our economy and it’s one that we need to respond to to support local businesses through,” he said.
He said the impact on businesses has been severe, adding: “We’ve all heard the impact on individuals though case work in our community, people who have lost their jobs or lost their income during this crisis.”
But Cllr Dromey also said the response to the outbreak has been “absolutely fantastic”.
“We’ve heard from lots of businesses who are doing what they can to adapt, to shift online, to carry on going, and to protect jobs, and to use the furlough scheme […].
“We’ve also heard some really inspiring stories of businesses helping out in the effort against coronavirus, from the Clarendon Hotel in Blackheath, which is offering accommodation to NHS workers, to local food businesses which are providing food to key workers and those most in need,” he said.
The recovery plan includes offering support grants to residents, deferring business rents, foregoing some fees and charges, and creating a ‘Lewisham backs business’ task force, made up of lead members and representatives from the local business community, industry, and officers “to develop and coordinate a whole council response to supporting business and jobs recovery quickly and inclusively from the disruption of Covid 19”.
The council has also sent out more than £34 million in small business grants to over 2,500 businesses.
Pictured: Cllr Chris Barnham (Tl), Cllr Joe Dromey (Tr), Mayor Damien Egan (Bl), Cllr Paul Bell
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