Local authorities in England have played a vital role during the COVID-19 pandemic: paying grants to businesses, providing support to vulnerable people who are shielding, setting up community testing facilities and taking on the most challenging contact tracing, all the while keeping existing services running. Authorities have achieved this while dealing with the impact of the pandemic on their finances, which were already under strain going into the pandemic.
The Ministry of Housing, Communities & Local Government (the Department) is responsible for working across government to support HM Treasury to make major decisions about local government funding. The Department plays a significant role in distributing that funding. The Department is also responsible for the accountability system that assures Parliament about how local authorities use their resources, including preventing and responding to financial and service failure.
The Department acted quickly to support local authority finances early in the pandemic, announcing unringfenced grants for local authorities of £1.6 billion on 19 March 2020 and £1.6 billion on 18 April 2020. It supported local authority cash flow through measures totalling nearly £6.85 billion in the same months. In total, by early December 2020, the Department had provided £4.55 billion in unringfenced grants to support local authorities’ response to the pandemic, as part of £9.1 billion in COVID-19 funding for local authorities from government announced by that point.