£500m hardship fund not enough, says LGA Labour group leader Nick Forbes

Nick Forbes, leader of Local Government Association Labour, has told LabourList that councils will “almost certainly” spend more than the £500m allocated to them by government via a coronavirus hardship fund.

Speaking to LabourList today, the Newcastle City Council leader also said there had been “no advice or guidance on the use of that fund, nor how it will be distributed around the country” since the initiative was declared by Rishi Sunak last week.

Forbes explained that councils are being asked to spend money first and wait to be refunded at a later date, and expressed concerns that the government would “look after Conservative councils before they look after any other”.

He described this as part of a “pattern of behaviour” that had seen central government make announcements “without thinking through the consequences” for local government and the “on-the-ground” implications.

As well as commenting on the hardship fund, the Labour group leader outlined concerns about school closures, social care and the lack of protection for tenants in the private rented sector.

Hardship fund

Describing the financial assistance councils need, Forbes said: “There is no mechanism to pay councils for this other than the Bellwin scheme.”

The Bellwin scheme is a process to provide local authorities with financial assistance, to cover the costs they incur in having to respond to any emergencies or disasters in their area.

This process for claiming back funds requires the council in question to make any claim within a month of the event or incident, and allows central government to challenge the request.

Forbes went on to say that he wants to see a dedicated fund set up, like the Bellwin scheme, but without time limits in place restricting when local authorities need to make submissions for monetary assistance.

He added: “What we’re pressing for is for maximum flexibility to be able to use that fund. Because in some areas it may be that people will need help with their council tax; in others it may be that people need housing payments; in others it may be that people need one-off grants.

“What we’ve not got yet is the clarity on how that money will be distributed to local government. And this government has form in ensuring that they look after Conservative councils before they look after any other council.”

Asked whether councils are likely to end up spending more funding than currently allocated, he replied: “Almost certainly will do. £500m doesn’t go very far when we’re talking about potentially a fifth of the workforce losing their jobs.”

The LGA Labour leader argued that providing sufficient support is vital to ensuring that the burden of this crisis does not “fall on local council tax payments with all of the regressive inequalities that causes”.

Social care

On social care, Forbes said that he has had many conversations with the Secretary of State during which he has been told that “money is no object” and that councils will be reimbursed for taking the action required.

Local authorities have been instructed to set up an extra helpline so that the organisations have a point of contact in their local authority who can provide assistance to people who are self-isolating.

However, Forbes is sceptical. He told LabourList: “I’ve been around the block a few times, I’ve seen governments promise money tomorrow but tomorrow never comes.”

School closures

Forbes described the confusion caused by the Prime Minister’s announcement on Wednesday that schools would close on Monday, and noted that councils are struggling to deal with the logistical implications of the briefings.

“The PM said that school gates would close only to have the Education Secretary today – less than 24 hours later – saying that children of key workers are allowed to attend school,” Forbes told LabourList.

He added that it was typical of the “lack of thought” given to announcements, and called it a “practical example of the chaos and confusion that is coming out of central government”.

The group leader said that it is “entirely possible” that children wrongly turn up at school next week. He pointed out that there is still no definition of ‘key worker’ currently provided, and said that it is likely to be vague when finally revealed.

He also highlighted that it has not yet been determined which schools will stay open for the children of key workers, and explained that local councils cannot tell parents where they should be sending their children after Friday.

Forbes went on to cite confusion around what happens with free school meals. The government has indicated that some may keep distributing free school meals, while also suggesting a national voucher system.

He said there has been “no thought or consideration into how kids that qualify for free school meals will still get them”. There are around 1.5 million children eligible for free school meals at the moment – a figure that is likely to go up in weeks ahead.

Forbes also explained that due to the fragmented school system and the lack of council control over the educational institutions in their areas, it is being left to schools themselves to manage the problem.

He pointed out that the announcement would mean school kitchens staying open, which would be in conflict with the statement and advice on closing schools, sending home staff and shutting down school buildings.

Private renters

Chancellor Rishi Sunak revealed on Tuesday that the government would introduce a mortgage holiday scheme for three months, as part of a £330bn package to support the economy through the coronavirus crisis.

Forbes suggested that the failure to protect private renters within this measure was a result of the Chancellor and Prime Minister “seeing it through the lens of friends of the Conservative Party, rather than the bulk of people in the population”.

The Labour group leader described other additional costs that local authorities were taking on, which were “overlooked” by central government when making coronavirus announcements.

These included the costs of ensuring that thousands of council staff can work from home – buying extra subscriptions for Office 365, for example. He also mentioned using council workers to support local charities like food banks.

There are a number of ways that councils can support residents, including making discretionary payments to support people with accommodation costs or by awarding people reductions in council tax.

But successive cuts to the authorities’ budgets over the past ten years has seen a significant amount of money taken out of local government – some councils have had their funding from central government cut by as much as 80%.