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<p>Councils across the country are supporting communities, protecting the most vulnerable
and helping the NHS in our efforts to combat Covid-19. In order to meet additional
cost pressures, we are providing local authorities with an unprecedented package of
support, allocating £4.3 billion of support for spending pressures, including £3.7
billion of un-ringfenced grants and the £600 million Infection Control Fund. This
direct financial support the Government has provided is just part of the comprehensive
package of support which includes cashflow measures, support for the homeless, and
bus and tram services, not to mention grants and business rates reliefs for businesses.
In total, the Government has committed almost £28 billion to local areas to support
councils, businesses and communities.</p><p>The Secretary of State has also announced
measures to address lost income, including:</p><ul><li>a co-payment scheme to cover
irrecoverable Sales, Fees and Charges income in 20/21 with the Government covering
75 per cent of losses beyond 5 per cent of planned income;</li><li>phased repayment
of Collection Fund deficits over the next 3 years;</li><li>a commitment to determine
what support is needed to help councils meet the pressures of irrecoverable tax income
at the Spending Review.</li></ul><p>Our new approach to financial support for councils
in the fight against Covid-19 is more robust and longer-term, replacing both previous
rounds of allocations. It shares the burden fairly between central and local government.
We have reset the whole approach by estimating both expenditure pressures and income
reductions through to the end of the financial year, based on what local authorities
have told us in the latest financial monitoring and operational response. Over 99
per cent of local authorities responded to our May Covid-19 financial monitoring survey.
We are extremely grateful for their continued collaboration, which enables us to understand
pressures at a national and local level.</p><p>We will continue to monitor the impact
of Covid-19 on local government and would ask that any local authority who is faced
with an unmanageable pressure or is concerned about their future financial position
should approach MHCLG to discuss.</p>
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