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State of the Region 2020 Full Report

Impact on Local Government

Councils have spent hundreds of more than expected during the lockdown on providing social care, personal protective equipment for staff, housing rough sleepers, and supplying emergency food packages, while losing even larger amounts in lost revenues from council tax, parking charges and leisure fees. The BBC carried out research with councils on the impacts and they highlight that impacts include lost business rates, council tax holidays and emergency payments for families whose incomes have disappeared have all hit upper tier councils' income, at the same time as rising costs of adult care and providing protective equipment (PPE) for carers. Some of those councils would also typically depend on tourism for large chunks of income, such as dividends from airports they own or parking fees from visitors. Birmingham City Council -the largest authority in Europe -said "given the size" of its forecast shortfall of £212m across 2020-21 and 2021-22. after £70m government funding already received, a section 114 notice "would not rectify this situation“

The pandemic also comes on the back of several years of cuts,  which many local authorities facing large deficits and councils expecting to be in the red by £5bn and potentially by £8-10bn if spending carries on at the current rate. The FT has highlighted that councils have warned the latest announcements will not be enough to prevent financial failure of councils. Council total budgets for last year came to £56bn and costs to date on the pandemic have been £4.8bn and could reach £10.9bn.

General Public Services Spending

  • Spending per head for general public services inthe West Midlands remains below the UK average at £98 in 2018-19 compared to £110. This is the sixth highest out of the 12 regions 
  • Yorkshire and The Humber had the lowest spend on general public services per head with £71 followed by the East Midlands with £76.
  • Scotland and Northern Ireland had the highest spend on general public services per head in 2018-19 at £235 and £209 respectively. 


Local Government

  • Funding for local government across England fell by 49.1% between 2010-11 and 2017-18. The figure for the West Midlands was broadly in line with this trend (48.4%)
  • Because local government also raises some of its own revenue (e.g. through council tax), the overall drop in its ‘spending power’ was less across England (28.6%). The West Midlands (30.1%) experienced a fairly average reduction
  • However, these figures disguise local differences within the West Midlands