Mayor of Newham demands government steps in to plug £61m black hole in town hall coffers
PUBLISHED: 17:00 16 July 2020
The mayor has demanded the government fulfils a promise to allow the council to plug an estimated £61million budget black hole.
Mayor of Newham Rokhsana Fiaz and Cllr Terry Paul, cabinet chief for finance, want ministers to follow through on a pledge to provide “whatever’s necessary” to cover the cost of coronavirus.
To date, the borough has received from government just over £20m plus £3.2m from a council tax hardship fund.
A £500m pot announced by government on July 2 has yet to be divided between councils, but Mayor Fiaz and Cllr Paul claim Newham’s share will not meet needs.
Mayor Fiaz said: “While every pound is welcome, it is simply not enough given the scale of challenges. The government clearly doesn’t grasp the scale of the deprivation and inequality in Newham.”
Prime minister Boris Johnson is urged to provide extra support in the form of a Covid-19 deprivation premium for areas hit hardest by the pandemic.
“Funding needs to properly reflect the scale of the challenges we face. Paying for the economic impact of Covid-19 cannot be carried by our people,” the mayor said.
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Minister for regional growth and local government Simon Clarke said: “We’re giving councils unprecedented support during the pandemic with a £4.3billion package, including £3.7billion of un-ringfenced grants and the £600million infection control fund, to tackle the spending pressures they have told us they’re facing.
“To date Newham has received over £20million of this with further funding to be announced shortly. In addition, its core spending power rose by over £21million this financial year even before additional emergency funding was announced.
“The government will cover 75p in the pound of lost income such as parking fees and museum entry charges for councils where that loss is more than they could have been expected to plan for.
“For many councils, this will be a significant portion of the income lost as result of the pandemic,” he added.
Councillor Paul said Newham doesn’t face running out of money, but the council “cannot be complacent”.
He warned business tax and council tax losses could cause “major budget issues” next year.
A council report suggests further savings of £8m to £15m may be needed on top of the £45m agreed in March’s budget.
The mayor is due to launch Newham’s Covid-19 recovery plan later this month.
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