Government support package ‘will not come close’ to covering council losses

Statement from Councillor Stephen Alambritis, The Leader of the London Borough of Merton.

The Leader of the London Borough of Merton has said the Government’s latest support package for councils “will not come close” to covering the losses being incurred by authorities across the capital.

Councillor Stephen Alambritis, whose authority in South West London has been recognised as one of London’s more financially stable in recent years, warned that the latest funding package – which only helps cover less than 75% of losses incurred through freezing local fees and services – will create a £20 million hole in budgets for his council.

He said: “During the course of the pandemic, we’ve worked tirelessly to protect our most vulnerable residents and support those in need. We’ve absorbed the cost of launching new services almost overnight and redirected resources and staff towards the crisis.

“This announcement, while welcome, does not come close to meeting the combined impacts of loss of income and additional spending incurred by councils. By only being able to recover 75% of 95% of our income losses, we will be left with a budget gap in Merton of an estimated £20 million on top of the pressures we had going into the pandemic.

“That’s far too much for any local area to absorb. Councils were already at breaking point before Covid-19 and the promised “comprehensive support package” promised just isn’t being delivered in this announcement.

“We also have to factor in that we are by no means out of this yet. The risk of a second wave is there, and consumer confidence will take time to return to the high streets. Losses to local budgets are far from over.”