THE Town Hall could spend 20 years paying off tens of millions of pounds to central government to avoid making huge cuts to balance a black hole left by the coronavirus crisis.

Islington Council has suffered a significant loss of income and, together with the costs of keeping services running during the pandemic, the authority could fall nearly £40million into the red.

It faces a £24m bill for extra services required by the response to the health emergency, and has lost £50m in income from rents, rates and tax.

The government has so far provided £16m extra funding.

Councillor Satnam Gill, the Town Hall’s finance chief, said: “The real difficulty is that we’ve had 10 years of austerity that has whittled down our reserves in many ways.

“The government has hinted that they will give us more money. It’s unlikely they will give us the £36m we need. But until we know what they will give us it’s difficult to talk about what might happen.”

He added: “The figures could change. People might start parking again, people might start using leisure centres again. These things can make a real difference to our finances because that’s the income we have lost.

“But we don’t think this will start happening quickly. We’re looking at what will happen if we are £10m to £20m in the red. It could be that the government will allow us to borrow money and pay it back over 20 years.

“That will mean that we won’t be making huge cuts. But we don’t know what the government is going to do, so we don’t know what is possible yet.”

The minister for Local Government, Simon Clarke, said: “In total, the government has provided over £27bn to support local councils, businesses and communities in fighting the pandemic, including £600m to help reduce the infection rate in care homes and £300m to support track and trace.”

He added that the government is working on a “comprehensive plan to ensure councils’ financial sustainability over the coming year”.