Greenwich Council and other local authorities could run out of money by the end of the year if the government does not step in to help fund their response to the coronavirus pandemic, a senior councillor said yesterday.

Chris Kirby, the cabinet member for finance, said that the government was expecting councils to resume business as usual from July and “needed to
get into the real world”.

The meeting of the cabinet, the council’s main decision-making body, also heard a plea from the town hall’s most senior officer, chief executive Debbie Warren, for certainty over how much money the government would spend on supporting councils through the crisis.

She said the emergency would cost the council between £40 million and £50 million – but it had only received £17 million back.

Kirby said: “We’ve real concerns about the way the government has moved the goalposts when it comes to guaranteeing funding for local authorities. We’ve gone from ‘money is no object’ to inferences that we’re on a splurge and spending money on things we really don’t need to be spending money on, which is incredible given the commitment local government has mad during this crisis.

“Just one example of where the government needs to get into the real world is that the way they collect financial data from local authorities assumes that we will go back to a pre-Covid-19, normal financial world from July, which is absolutely in the realms of fantasy and isn’t helping anybody.

“Frankly, the money they have given us will run out late June, early July. There needs to be additional tranches of money from central government or councils up and down the country, not just us, will be dipping into their reserves, and those reserves will likely not last the rest of the year.

“All around the country, we’ve got real, major financial concerns with the government reneging on promises that they made.”

Councils as diverse as Labour Hackney and Conservative Oxfordshire have warned that the coronavirus could bring them to the brink of collapse.

‘Rollercoaster ride’

Warren, who as chief executive is politically neutral, said that council staff and partners had “been on a rollercoaster ride, and we’re certainly not at the end of that ride”.

“We are likely to be, this year alone, £40-50 million out of pocket, and we have secured £17 million so far,” she said.

“But the bit that worries me so far is the long lasting impact of Covid, and will our income streams – particularly council tax and business rates – recover quickly enough to allow us to carry on delivering the services our community needs.

“A plea to all those involved in the money side of our nation – financial certainty is the one thing that we all need, and we have none of that at the moment.”

Both Warren and council leader Danny Thorpe paid tribute to the work of council staff, volunteers and other frontline workers. The council’s volunteer hub has now fielded 40,000 calls from vulnerable people, distributed 2,000 food packages and fetched 1,000 prescriptions.

“We know that our communities and our residents will be poorer because of the decisions that have had to be made,” Thorpe said, before referring to the Westminster government’s bailout of Transport for London last week, which comes with temporary cuts to all-day free travel for under-18s and peak-hour travel for over-60s, although details of how this will work have not been published.

“The impact of the government’s takeover of TfL on our communities is going to be a devastating blow,” he said, adding that 3,000 people had signed his petition against the cuts to free travel for under-18s. “I have had emails from pensioners who have been writing to ask what happens to their Freedom Pass.

“We know that without those valuable lifelines, their lives will not only be poorer, these are the people who are going to have to pay a very high price indeed for this pandemic.”

Monday’s meeting was the first meeting of Thorpe’s new cabinet, the first to be held by video conference and the first to be broadcast to the public.

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