By Rob Whiteman, CIPFA CEO
In recent weeks, we have seen lockdown begin to lift, albeit in varying degrees, across the entirety of the country. While the government's rhetoric has focused on economic recovery and returning to normal, things are notably not quite the same as they were. On public transport, masks are now obligatory. Your pint at the pub will likely be table service only. This adjusted sense of normality is also being felt in local government, with CFOs now in the thick of identifying what a new normal looks like for their local area. Indeed, developing and deploying strategies to mitigate the medium- to long-term impacts of the pandemic may well prove even more challenging than the immediate crisis response.
Much of this challenge will be as a result of mixed messaging from government regarding the level of support the sector can expect. Entering the crisis, councils were encouraged to spend what they needed to get the job done. Councils acted in good faith, supporting the fight against COVID-19 in their communities on the basis of these pledges. However, it's clear that over time ministers have moved away from an initial vow to support local authorities in full, to promising future attention in the context of burden sharing.
The latest £500m tranche of government funding, even when analysed generously, leaves a substantial £1.2bn gap between the support provided to date and the present and future costs likely to be incurred as a result of the pandemic. With many councils having entered the pandemic on the back of a punishing decade of austerity, these additional pressures will be driving more organisations than ever towards considering a Section 114 notice.
However, a great deal of the challenge will also be rooted in the non-clinical risks that COVID-19 poses. Understandably, much of the focus has been on the immediate medical risks and the protection of public health. Operation Shield was designed specifically to support and protect clinically vulnerable individuals. But COVID-19 is not just a health hazard. While infection rates may be subsiding, the problems for many are only just beginning.
Recent headlines point to rising reports of domestic violence, as those in abusive situations are locked down with their abusers. Low income families, those with high levels of debt, or those at risk of unemployment following the inevitable economic downturn all face higher risks to their wellbeing as a result of the pandemic. A decline in referrals to children's social care risks a surge in demand as lockdown lifts. These are the risks which will likely have longer term consequences for many families, as well as for the financial sustainability of many local authorities.
Prior to the pandemic, many local authority services were struggling under the weight of increasing demand. The 2019 CIPFA-Institute for Government Performance Tracker indicated that, over the next five years, demand for more than half of public services will rise faster than population growth. This rise is particularly noticeable in health and adult social care services due to an ageing population and an increase in the number of people with multiple, complex conditions.
COVID-19 will likely exacerbate the trend of rising demand, with the social and economic challenges created by the pandemic impacting members of local communities who had not previously been reliant on support from local services.
Therefore, in addition to lobbying for enhanced funding packages from government in the lead-up to the spending review, it will be important for councils to identify those hard-to-reach members of their community who fall into non-clinical risk categories, and create well-evidenced, targeted support systems that mitigate future financial pressure.
Local authorities have been under financial pressure for some time. While the pandemic creates unprecedented financial challenges, councils are skilled at transforming and delivering services with constrained funding. I do not want to understate the scale and severity of the present challenge, or in any way imply that councils are not in need of a fair and sustainable funding solution. They are and this will need to be addressed in the upcoming spending review. But while we wait for this, authorities must take action where they can. A culture of transformation is already embedded within local organisations. Now's the time to kick it into high gear.
This article first appeared in Local Government Chronicle.