Local Authority cashflow and financial impact: COVID-19

MHCLG is concerned about the overall financial and cashflow impact on local authorities. 

They have asked for information about the effects on authorities, and, in a letter from the Secretary of State to local authority chief executives, have asked “that any local authority contact MHCLG officials if faced with immediate unmanageable financial pressures”.  Some issues will be addressed immediately (short-term cashflow, delivering services connected to COVID-19) but others are likely to take longer (financial viability of authorities as a result of reduction in taxation income streams and inability to deliver expected savings programmes). 

The government is still awaiting confirmation from the EU that the state aid thresholds can be disapplied.  As far as we are aware, the EU has not made a decision yet. 

Subject to this approval, “authorities would be able to award the discount ignoring the de minimis state aid limits”. 


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