City Council response to Government emergency funding allocation

Published: Friday, 1st May 2020

Council leader, Susan Brown, wrote to Government today in response to confirmation of its emergency funding allocation for local authorities.

In her letter she highlighted the need for additional financial support for Oxford City Council.

While expressing thanks for the £1.6 million support package, Cllr Brown said the Council faced a £24 million total funding gap over the coming years. That includes a £12 million impact in the current financial year, against the Council’s annual turnover of around £90 million. She noted the allocations were made across the country on a per capita basis, which does not take into account the more challenging position for city-based local authorities such as Oxford.

Oxford City Council has now been working under Coronavirus emergency arrangements for over six weeks, during which time it has delivered food, medicine and other support to more than 1,500 vulnerable households across the city, rented more than 120 hotel, college and hostel rooms for homeless people to social distance, and facilitated more than £75 million of immediate financial support to Oxford’s businesses. The Council followed Government guidance to act fast and decisively to deliver help to the many people in need across the city, rather than worry overly about the cost implications at this stage.

Oxford City Council is significantly more exposed to these financial impacts than many neighbouring councils. This is in part due to the city forming a focal point for some of the most difficult challenges, such as housing rough sleepers and targeting assistance across diverse communities. In the main, however, it reflects the Council’s longstanding reliance on generating income – in addition to that we receive from council tax and business rates - to help pay for Council services to residents and businesses.  This includes income from the Council’s historic city centre retail property portfolio, from car-parking, and from commercial earnings generated by its wholly-owned direct services company ODS and its housing development company OCHL.

The focus on income generation is called ‘the Oxford Model’, which has served Oxford’s council taxpayers very well for many years. It has enabled the Council to secure significant additional investment to support economic growth, pioneer low carbon and energy generation initiatives, lead work nationally on the introduction of electric vehicles and get additional housing built that the market is not delivering. It has also helped the Council to avoid making cuts to priority services as central Government funding was withdrawn. However, it now leaves the Council dealing with the consequences of Government policy to tackle the spread of Coronavirus, resulting locally in empty car parks, halted ODS commercial work, new house building and many commercial tenants facing uncertainty and struggling to pay rents.  

Communications with other district councils in a comparable position to Oxford (urban centres surrounded by more rural areas) suggest they face similar challenges.

The Council has taken immediate action to furlough staff whose roles can’t currently be fulfilled. It has redeployed many others to accelerate the delivery of emergency assistance to vulnerable households and processing of emergency financial support to businesses.

While the Council remains focused on helping to protect Oxford from the worst impacts of COVID-19 and then manage the slow transition back from the lockdown, it is asking Government to step in with a broader package of assistance that will help the Council to continue to support communities and businesses through the current crisis, help Oxford bounce back in the post-Coronavirus recovery and, continue to develop Oxford’s economy that is one of the few net contributors to the exchequer.

Both letters are available to download here.