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Local government finance and the pandemic

Local authority finances are under significant pressure in the context of the COVID-19 pandemic: government has asked local authorities to deliver additional services; the cost of many existing services has increased; some opportunities to implement savings programmes have been disrupted; and various locally generated income streams have fallen. These challenges follow a decade in which local authority funding has reduced while demand for key services has risen. As a result, the ability of authorities to maintain financial and service sustainability this year and over the medium-term is being tested.

Our previous report, Overview of the UK government’s response to the COVID-19 pandemic, set out local authorities’ role in the UK government’s response to COVID-19. Our new study will further examine the evolving financial pressures on local government and the support provided from central government.  It will assess whether government has taken effective steps both when asking local government to deliver new services and to meet its responsibilities for supporting financial sustainability across the sector.

More information about our work to report on government’s response to the COVID-19 pandemic can be found here.