Coronavirus could hit Tower Hamlets welfare services with £10m funding gap in next 12 months

Mayor John Biggs... wrote to Secretary of State on "just how important the voucher scheme is at this

Mayor John Biggs... wrote to Secretary of State on "just how important the voucher scheme is at this time of crisis". Picture: Mike Brooke - Credit: Mike Brooke

The recovery from the coronavirus emergency could hit public services because of a £10million gap in the cash to pay for them.

That’s the stark warning from the Mayor of Tower Hamlets who says local authorities in areas of deprivation like the East End are facing reduced payment from the government.

The council has been given £1.4m less in the second wave of emergency funding from the Ministry of Housing and Local Government compared to the first hand-out in March.

“The impact of leaving us to struggle will be devastating,” John Biggs warns. “We have a vital role to play in supporting the community during the recovery.

“But failing to take deprivation into account in the second wave of emergency funding is a sign of backtracking on the promise to fully reimburse local councils for the coronavirus response.”

Communities Secretary Robert Jenrick has publicly committed to “stand behind councils and give them the funding they need”.

But the town hall believes it won’t be fully reimbursed for all the costs to get through the crisis and fears that services like adult and children’s social care may have to be trimmed by a fifth.

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The first cash hand-out to local authorities up and down the country was £1.6billion to cope with the Covid outbreak, based on adult social care needs and the government’s own assessment for general needs.

But the second hand-out of £1.6bn doesn’t take into account the needs of deprived areas like Tower Hamlets, the mayor says.

The council only received £9m in the second cash flow from Whitehall, compared to £10.4m in the first wave, a cut of almost 14pc.

Local councils generally are facing a £126m total cut in emergency funding the second time round, despite many like Tower Hamlets coping with the highest infection rates in the country, according to the Local Government Association. All local authorities together have a total financial “black hole” between £10bn and £13bn because of pressures of fighting Covid-19 while having to buy protective gear for essential workers.

All that is coupled with loss of council revenues during the pandemic. Tower Hamlets alone estimates having to spend an extra £24m in the next 12 months, while income is reduced by £34.6m, creating a £10m gap on services in the East End.