Mayors in some of England’s biggest cities are warning that local authorities are at risk of going bust with potentially devastating consequences for communities unless the government takes immediate action. As the impact of the Covid-19 crisis hits local authorities, the mayors of London, Greater Manchester, Sheffield and Liverpool have issued a joint call to highlight the seriousness of the issue and urge Boris Johnson to respond. “Unless the government acts immediately to support local and regional government in England there is a very serious risk that the economic recovery from Covid-19 will be choked off by a new era of austerity – something the prime minister promised wouldn’t happen,” the mayor of London, Sadiq Khan, said. The situation is so serious that some local councils may be under threat of going bust, the mayors warned. The mayor of Greater Manchester, Andy Burnham, said support is needed in the north of England now to stop the “2020s being as bad as the 1980s”. Speaking exclusively to the Guardian, they warned the situation is now critical and emphasised that councils will be forced into laying out large-scale spending cuts in the coming weeks unless the government urgently steps in to support local and regional authorities. “The harsh truth is that with business rates, council tax and transport fares income all falling significantly because of this virus, local authorities will have no choice but to start making significant savings within days or weeks in order to balance our budgets,” said Khan. “However, with the right financial support from the government, regional mayors can play a huge role in shaping an economic recovery that creates a fairer and greener country.” The communities secretary, Robert Jenrick, has previously said councils will get the funding they need and Boris Johnson has said there will be no return to austerity as the country grapples with the pandemic. But the mayors have said the government has so far refused to commit to providing sufficient support to local and regional authorities responding to the pandemic. They are also suffering from reduced income from business rates and council tax. Transport fares incomes have dropped by as much as 90%. James Jamieson, chair of the Local Government Association and Conservative leader of central Bedfordshire council, has estimated councils will face costs of nearly £13bn to tackle the crisis this year. Johnson said at prime minister’s questions on Wednesday that he is announcing a further £63m of local welfare assistance for councils to use at their discretion to help vulnerable families. Central government has also given £3.2bn to local authorities to deal with the coronavirus crisis. Councils will also be allowed to defer £2.6bn in business rates payments to central government and they have been paid £850m in social care grants upfront in April. Councils across the Liverpool city region estimated their Covid-19 bill is likely to be about £341m over the next six months. With only £100m allocated so far from central government, concern is growing that the region’s local authorities are staring at a shortfall of almost a quarter of a billion pounds. The combined authority is also spending an additional £5m per month in lost transport revenues and Mersey tunnel revenues are expected to fall by £10m this financial year. Furthermore, Merseyrail did not receive a bailout from the government. The mayor of Liverpool city region, Steve Rotheram, said: “At the beginning of this crisis, local authorities were told by government to do ‘whatever it takes’ to support communities. That’s what we have done – and the response from our local councils has been nothing short of incredible. But this response comes at a cost – and the figures involved are just startling. “Couple this with the drop in income from business rates, council tax, transport fares and tunnel tolls, without substantial extra funding from government then it will be impossible for local authorities to balance their budgets while maintaining services.” Burnham said: “Recovery will have to be built from the bottom up and councils will be crucial to this. The poorest communities have been hit hardest by the health crisis and now could be hit harder still by the economic crisis. “Support is needed now to stop the 2020s being as bad as the 1980s in the north. Councils will be at the heart of the recovery and government needs to fund them properly.” The mayor of Sheffield city region, Dan Jarvis, said: “The prime minister promised there would be no return to austerity but if local government doesn’t get the support it needs that’s exactly what our communities will be faced with.” A Ministry of Housing, Communities and Local Government spokesperson said: “We’re giving councils an unprecedented package of support, including £3.2 billion emergency funding, to tackle the pressures they have told us they’re facing. “In total, the Government has provided over £27 billion to support local councils, businesses and communities in fighting the pandemic, including £600 million to help reduce the infection rate in care homes and £300 million to support track and trace. “The Government will continue to work closely with councils to develop an ongoing assessment of costs as they support their communities through this national emergency.”