AN extra £500 million to boost councils racking up huge financial losses due to the coronavirus pandemic has been branded an “insult” by the leader of St Helens Borough Council.

Local Government Secretary Robert Jenrick announced the extra funding on Thursday, which comes as councils across the country report massive projected funding shortfalls.

Some areas, including Liverpool and Manchester councils have even warned they could go bankrupt if the government do not step in to fill the gaping black holes caused by their response to COVID-19.

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The government says the extra, unringfenced cash is part of a “comprehensive plan to ensure councils’ financial sustainability for the future”.

On top of that, the government also announced a major new scheme to help reimburse lost income during the pandemic and boost cash flow.

Where losses are more than 5 per cent of a council’s planned income from sales, fees and charges, the government will cover them for 75p in every pound lost.

Prior to Thursday’s announcement, St Helens Borough Council said it was facing a funding gap of almost £25 million.

St Helens has not had its allocation of the £500 million yet, but however much it is, it is not likely to make a major dent on the council’s funding gap.

“The independent Local Government Association, which represents all councils and all political parties, estimates that due to the fight against COVID-19 there is a funding gap of over £7 billion for the essential services councils provide,” said Cllr David Baines, leader of St Helens Borough Council.

“The Liverpool City Region alone faces a funding gap of £241 million.

“In that context it is hard to see the £500 million announced for the whole country by government minister Robert Jenrick this week as anything other than an insult.

“Councils across the country have been on the frontline serving and supporting communities, charities and businesses through COVID-19 and we were told to do ‘whatever it takes’, and that government would support us.

“We’ve fulfilled our part of that bargain and I stand with council staff – all keyworkers – and with council leaders and councillors from all political parties up and down the country who are increasingly angry and let down by the government failing to honour their promise to help us.”

On May 1, group leaders from all political parties on the council, as well as Labour MPs Conor McGinn and Marie Rimmer, wrote to Mr Jenrick asking for certainty around future funding.

The letter was even signed by Cllr Allan Jones, leader of the Conservative group on the council, who just this week called on councillors to put “political rivalries to one side for the people of St Helens”.

Mr Jenrick has yet to reply to this letter.

In May, Cllr Baines joined Liverpool City Region Metro Mayor Steve Rotheram and other leaders in writing to the Prime Minister in asking the same question, with a detailed case for the region.

Boris Johnson has yet to respond.

St Helens Star: St Helens Borough Council leader David BainesSt Helens Borough Council leader David Baines

Cllr Baines said: “The Tory government is showing utter contempt for the keyworkers in St Helens and the country who’ve gone above and beyond the call of duty in recent months.

“The social workers, the carers, the school staff looking after vulnerable children, the highways engineers, the recycling and waste collectors, the licensing and community safety teams, the leisure staff who were redeployed to manage our community hub keeping vulnerable people supplied with food, our library staff keeping residents engaged and active.

“They all had our backs through this crisis, and now we should have theirs.”

The government says it has worked closely with local authorities to understand their needs and provided more than £27 billion to help councils, businesses and communities through COVID-19.

This comprehensive support includes: £3.2 billion of new funding to councils; £600 million to adult social care to support providers through a new infection control fund; more £20 billion in support for businesses; £500 million in council tax hardship funds to offer economic support to the most vulnerable and £300 million to support track and trace.

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Local Government Secretary Robert Jenrick MP said: “Councils are playing a huge part in supporting their communities during this pandemic.

“From supporting the most vulnerable and keeping vital services running to operating local track and trace, council workers have been at the forefront of this great national effort and are the unsung heroes of this pandemic.

“This government will continue to stand shoulder to shoulder with councils and communities as we recover from this pandemic as we renew our commitment to unite and level up the country.”