Mayor Rees calls for Government bailout to plug £82m blackhole

Mayor Marvin Rees is pleading with the Government for an NHS-style bailout for local authorities as he warned it will take Bristol years to recover from the coronavirus.

Coronavirus in Bristol 30th April, 2020

Adam Postans (Local Democracy Reporter)

Bristol city council faces an £82 milllion blackhole that will threaten frontline services. The pandemic is having a devastating impact on income vital to maintaining these services, such as from council tax, parking charges and business rates, as people lose jobs or stay at home. Mayor Marvin Rees is now pleading with the Government for an NHS-style bailout to support local authorities, similar to the one received by the NHS.

Earlier this month, Health Secretary Matt Hancock announced NHS trusts would have £13.4 billion worth of debt written off to help them fight the outbreak.

“We have lost revenue of £80million through this crisis.”

Mr Rees says the Government must now do the same for city halls because some local authorities face “going to the wall”, although he insists the city council is in a better position than most.

The mayor’s demand comes as the amount each local authority in the country is receiving from the second of two waves of £1.6 billion in Whitehall funding to tackle the immediate crisis is announced.

Bristol City Council is getting £12.9 million, but this is £638,000 less than the £13.5 million it received during the first round of emergency cash at the end of March.

South Gloucestershire Council, in contrast, has been awarded £7.9 million this time, on top of the previous £6.1 million. And North Somerset Council will receive £5.9 million, about the same as the first lot of funding.

Speaking during a fortnightly media briefing on Zoom on Wednesday, Mr Rees said: “We have had less. There is a question to be asked there.

“The financial discipline brought in over the last four years has put us in a relatively strong position but our position is nonetheless challenged.”

He said the £26.4 million from government did not cover the city council’s £29 million costs of coping with the emergency, such as paying for adult social care.

“The inadequacy of government finance and the drive of national government to control everything from Whitehall is causing major problems in our ability to respond to the crisis,” the mayor said.

“What the Government is not doing is taking into account the lost revenue to local government.

“They are not grappling with the importance of local authorities raising revenue to cover the cost of core services now.

“We have lost revenue of £80 million through this crisis.”

Mr Rees said that some income from business rates that the council relied on could be lost permanently if firms did not return after the period of furlough.

He said: “We will be making the case for three things to underpin our economic recovery.

“We want the Government to back our major infrastructure regeneration programmes. They need to guarantee they’re going to happen.

“We want the Government to back us in our city centres and our high streets.

“With people not going out to restaurants, the night-time economy under all sorts of pressure, retail is under pressure, we need some kind of real, solid commitment that the Government works with cities and towns to ensure our city centres and high streets survive, those economic hubs that stitch communities together.

“A few weeks ago, Secretary of State Matt Hancock announced the cancellation of debt to the NHS… We need the equivalent for local government… It was a quick statement, the debt gone.

“Local government is under phenomenal financial pressure. We are an integral part of local services provision.

“We need that financial settlement with government reset, so we need the equivalent  of the NHS debt cancellation for us.”

Mr Rees said four new food banks and 11 new food clubs, where people pay a nominal fee and receive about £15 worth of food, had been set up in the city since the crisis started.

Food-bank usage has tripled in Bristol, and the mayor said they would be needed “for the foreseeable… We are not going to be stepping away from food banks for some years to come now.

“If we bounce back quite quickly, the social bounce-back for ordinary people would not be that quick… It is not like ripping off a band aid.

“There are all sorts of other things going on in society right now – increase in domestic violence, child safeguarding issues, mental health, depression, anxiety, loss of self-esteem, relationships breakdown – that are contributing to that lag of any economic uplift being passed over to ordinary workers and businesses, so the consequences will echo for years into our future.

“You can have a recovery with wealthy people doing well but lots of people on lower incomes not sharing in that recovery… That is what we should avoid.