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27 May 2020updated 25 Jul 2021 10:43am

Quietly, austerity has already become the response to coronavirus devastation

Government rhetoric of “whatever it takes” has morphed into “share the burden”.

By Anoosh Chakelian

Doctors and other frontline workers fear it. Top economists warn against it. Boris Johnson vows not to do it.

But austerity as an economic response to the pandemic is already underway. This is despite cuts to everything from green spaces to hospitals to women’s refuges making Britain less resilient in the face of a pandemic.

At the beginning of the crisis, the Local Government Secretary Robert Jenrick told 300 English council leaders and sector bodies in a conference call on 16 March that the government would do “whatever is necessary” to help, in an echo of the “whatever it takes” language used by the Chancellor Rishi Sunak in his 11 March Budget, just as coronavirus had begun spreading in the UK.

“My absolute priority is to ensure they [councils] are well placed to respond to coronavirus and protect vital services, including social care,” Jenrick said. “Everyone needs to play their part to help the most vulnerable in society and support their local economy, and the government will do whatever is necessary to support these efforts.”

Local authorities, responsible for funding services crucial to the coronavirus response – schools, holiday hot meals, social care, managing parks, refuse collection, etc – began spending on protecting their residents. Reimbursement was expected at a later date from a government promising “whatever is necessary”.

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This changed when Jenrick, answering questions at a select committee hearing on 4 May, said central government would not be paying councils for everything after all: “We wouldn’t want anyone to labour under the false impression that what they are doing is guaranteed to be funded by central government.”

Council leaders accused the government of “backtracking” on funding promises. “Black holes” in council budgets were reported in the local news across the UK – £100m in Hampshire, £80m in the Highlands, £50m in Edinburgh, £50m in Rotherham, £27m in South Gloucestershire, £25m in Sunderland, £25m in Southwark, and so on.

The mayor of Lewisham Damien Egan told a meeting of London Labour members yesterday evening (26 May) that his council had seen a net loss of £50m, and that the “whatever it takes” rhetoric from Jenrick during that initial meeting with councillors had since morphed into imploring them to “share the burden”. “Confidence we’d have all that money refunded is no longer there today.”

Councils have not been left entirely without funding. A new “hardship fund” of £500m was announced for local authorities in the Budget “to directly support vulnerable people in their local area”. This was a small amount relative to the number of local authorities, and considering the overall funding gap – £6.5bn by 2025 – that councils in England were facing at the time.

Eight days later, the government announced £1.6bn of additional funding to help local government with coronavirus pressures on all their services. A further £1.6bn of funding was announced on 18 April 2020.

When set against those “black holes” listed earlier, this doesn’t add up to a reversal of austerity plus additional pandemic funding. It was a “dangerously low” settlement, according to Adam Lent, director of New Local Government, who warned that adequate local government funding was a “matter of people’s survival”.

“It is appalling that the government has now rowed back on its commitment of full financial support for these key workers and services,” he said. “The latest injection of £1.6bn falls way short of what is needed. Far from cutting council funding, the government should be increasing it in order to better protect the country from the pandemic and makes sure selfless public servants remain safe.”

The mayor of Liverpool Joe Anderson told the New Statesman: “Covid has cost us £78m so far, but [we have] only received around £34m from government. It’s around £1m every week in lost income.”

Although Anderson agrees with the government’s stated aim to “end austerity”, he sees a gap between this rhetoric and the reality after Jenrick’s U-turn.

In 2010, the original austerity agenda mainly outsourced the pain of cuts to local government, meaning it shouldered the burden of difficult decisions – and often the blame for them.

Before coronavirus hit, local authorities were set to lose 60p in every £1 of central government funding since 2012, according to a report by the Local Government Association. It looks like this central pillar of austerity is still in place, even in the midst of a pandemic.

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