In response to recent MHCLG figures on the estimated collection fund deficit relating to council tax in 2020-21 Rob Whiteman, CIPFA CEO said:
"The new council deficit figures aren't as black and white as they may seem.
"The government announced last July that councils will be able to spread repayment of any 2020/21 deficit, which today we see was estimated in January 2021 to be £509m, over the next three years. Today's figures also take no account of the actual outturn surplus/deficit position or the 75% tax income guarantee scheme outlined by the government in November, which will compensate councils for a large chunk of these losses.
"Ultimately, this financial hole isn't as deep as it looks. But with the government ending COVID support at the end of June, it's hard to see how councils will be able to afford to repay the remaining deficit without additional help from taxpayers in the future."
Notes to Editor
Official MHCLG estimates can be found here
About CIPFA
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. CIPFA leads the way in public finance globally, standing up for sound public financial management and good governance around the world as the leading commentator on managing and accounting for public money.