Councils face a budget black hole of £2bn this year due to unfunded coronavirus costs, a new study has found.

 

The report from the Institute for Fiscal Studies (IFS) said that while loss of income and council tax coupled with extra spending came to £7.2bn, the Government has so far promised only £5.2bn or 4% of councils’ pre-crisis spending. 

Although many councils have reserves, drawing on them to plug the coronavirus deficit would leave them exposed.

The IFS instead proposed targeted extra government grant funding for the councils most in need and a relaxation of borrowing rules.