Covid-19 and councils' finances: understanding risks and impacts & improving policy

Councils are on the front line of the coronavirus crisis, being responsible for key services like social care and homelessness prevention and facing revenues falling due to lockdown. Government has provided them with billions of additional funding, but more may be required. A key challenge is ensuring this is allocated appropriately. Without such targeting, either more than is needed across the sector has to be provided or the most exposed and least resilient councils could run out of money or be unable to maintain services. Councils also need to understand how their residents are being differentially affected by the crisis.

To help address these issues, we will analyse:

1. A suite of ex-ante indicators of the population and financial risks facing different English councils and their potential financial resilience, and publish the compiled data:

2. Actual changes in residents’ incomes and spending, council tax payments and problems, and benefit claims by local area across the UK, which will provide evidence on how key risks are crystallising;

3. How different English councils’ spending and revenues are changing during the course of the crisis, and the extent to which this corresponds to the aforementioned ex-ante and real-time indicators;

We are having frequent discussions with central and local government, and the new research proposed here would directly feed into this – and inform wider public and political debate –, allowing us to help policymakers ensure councils have the funding and flexibility so that vital services can continue to operate and meet new demands