Recommendation 23

Local authority representatives told us about the unprecedented level of financial uncertainty they have faced and continue to face as a result of the pandemic.61 Manchester City Council said that the impact on local authority commercial income, which does not attract any government support, was beyond what could “have reasonably been planned for or fully mitigated in the budget and reserves”.62 DCN similarly told us that councils faced significant uncertainties on the income they will receive from business rates and council tax. It explained that the long-term impact of the pandemic on business was still to be seen and increasing numbers of households were seeking support with council tax.63 Business failures can reduce authority business rates income, for example if properties become vacant.64 If a household receives council tax support, then the council tax income received by the authority is reduced by up to 100% .65 SIGOMA stressed that council 2020–21 budgets and plans included changes to increase efficiency which would have delivered savings into 2021–22 and beyond. These changes, and so these savings, may now not be possible.66 Manchester City Council told us that the pandemic had created pressures in its services due to ongoing demand for homelessness, adult social care and children’s services. CIPFA, SOLACE and Manchester City Council suggested that public expectations of some local authority services, such as libraries, parks and open spaces, may well have also increased.67