Lambeth taxpayers could face £28m bill to cover coronavirus costs

Taxpayers face a £28million Covid-19 black hole in their borough’s budget if the government does not fulfil a promise to cover the costs.

If left to foot the bill, the shortfall would cost Lambeth households on average an extra £205 – provided the government lifts an existing cap on maximum council tax increases.

The latest £500m injection of cash from local government minister Robert Jenrick would give the UK’s 343 less than £1.5m each.

Lambeth council has redirected staff and resources across the council to support residents throughout the pandemic, including

• investing additional resources in care homes,
• providing PPE
• giving out millions to keep businesses going and
• delivering over 20,000 food packages to vulnerable people.

But that extra spending, estimated for this financial year to be more than £27 million, combined with a huge fall in income from parking, business rates and council tax, risks leaving the council facing a colossal budget gap.

Prime Minister Boris Johnson initially promised councils that they would be fully reimbursed for all Covid-19 related costs.

But Lambeth has received only £19 million of additional funding – against Covid-19 spending of £47 million.

London councils, the body which represents all 32 boroughs, estimates that councils in the capital face a budget gap of £1.4 billion this financial year, with the government’s announcements being “wholly inadequate”.

Cllr Maria Kay, Lambeth’s cabinet member for finance and performance, said: “Robert Jenrick’s much-hyped announcement is once again little more than a sticking plaster for the challenges councils face.

“Instead of piecemeal announcements that provide a fraction of what local services need, the government should stick to their original pledge to fund councils to do whatever it takes to tackle Covid-19.

“I’m proud of the work Lambeth did to support local residents – delivering thousands of food packages to vulnerable people, providing PPE to care homes and supporting businesses to help keep them going.

“But to leave local councils to bear the burden of this national crisis would be profoundly unfair – and would restrict our ability to support a sustainable and equal recovery for all residents.”

Lambeth council leader Cllr Jack Hopkins wrote to the Prime Minister in April to press on the need for vital local services to be fully funded so that residents could be kept safe during lockdown.

Lambeth’s cabinet will consider the financial situation and plans to support the recovery at its meeting later this month.

Pictured top: Lambeth Town Hall