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Covid-19 and the economic emergency, unforeseen

How will local authorities be able to respond? Helen Randall and Henna Malik set out some of the options.

“We have never, in peacetime, faced an economic fight like this one” - Chancellor of the Exchequer, Rishi Sunak (17 March 2020).

The Treasury announced its emergency COVID19 economic package yesterday (17 March 2020). The announcement principally focused on support for business, through a proposed programme comprising £330 billion of guarantees (representing 15% of GDP), a 12 month business rates break for all businesses in the retail, leisure and hospitality sector, amongst other measures.

The Chancellor also announced:

"I am also taking a new legal power in the Covid Bill to offer whatever further financial support I decide is necessary."

So, what about local authorities, whose resources are already stretched to almost breaking point after a decade of austerity, and which, alongside the NHS, will be put under immense pressure by the impact of COVID19 on communities across the UK?

The Chancellor said that local authorities in England would be fully compensated in order to effect the proposed support package for businesses and that devolved administrations would receive at least £3.5billion of additional funding. This comes on top of last week's Budget announcement of a £500m 'Hardship Fund for Local Authorities'. The £500m Hardship Fund is currently expected to go towards providing council tax relief, which will either be through existing Local Council Tax Support schemes, or other complementary reliefs.

The Local Government Secretary Robert Jenrick announced last week that local authorities would be given greater flexibility to allow them to focus resources on responding to coronavirus.

The following measures have already been confirmed:

  1. the relaxation of restrictions on supermarket deliveries;
  2. routine CQC inspections are to be temporarily suspended during the COVID-19 outbreak;
  3. requests for deferrals of Ofsted inspections to be favourably looked upon where the request is a result of coronavirus;  
  4. councils are to be able to use their discretion in relation to adhering to Freedom of Information request deadlines;
  5. local authority financial audits are to be extended to 30 September 2020;
  6. proposed legislation to allow annual council meetings to take place virtually; and
  7. proposed legislation to allow council committee meetings to take place virtually for a defined period during the coronavirus pandemic.

The Local Government Secretary has also provided details of the recently assembled taskforce that will focus on strengthening local plans to tackle the coronavirus outbreak.

The challenges facing local authorities are greater than ever, as are the demands and pressures, whilst some of the initial measures provide some light relief, they do not, as yet, provide the full support that local authorities will need. Just some examples which occur to us, are:

  • support with staff and supply shortages - some of the shared governance arrangements e.g. delegations, inter-authority agreements, co-operation agreements and LAGSA 1970 could be deployed;
  • contingency arrangements to ensure full functioning of the democratic process, for example where key elected members or statutory officers may not be available;
  • assistance in light of the extra strain on emergency planning, (although local authorities are already doing a fantastic job);
  • rent breaks, as a result of redundancy, or sickness absence for residents of social housing (or private renters for that matter);
  • financial assistance, to help with childcare for children of key workers and front line staff;
  • support for residents over the age of 70 who are following government advice to self isolate - this is an ideal opportunity for local authorities to demonstrate community leadership by curating support networks for the most vulnerable groups in the community;
  • support to help rough sleepers; 
  • support to prevent further people becoming homeless and assist with extra demands on social services during the corona virus outbreak.

These are just some of the pressures that Trowers & Hamlins' local government team, anticipate will be faced by local authorities during this unprecedented, challenging time. 

Helen Randall is a partner and Henna Malik is a solicitor at Trowers & Hamlins. Helen can be contacted on 020 7423 8436 or This email address is being protected from spambots. You need JavaScript enabled to view it., while Henna can be reached on 020 7423 8636 or This email address is being protected from spambots. You need JavaScript enabled to view it..

 

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