More than half of council tax receipts will have to be spent on adult social care and children’s services by 2020, according to the Local Government Association.
Analysis produced by the association in advance of the autumn budget shows that 56p in every pound paid in council tax will be absorbed by the two areas.
This is up from 41p in 2010/11, and means that less cash will be available for funding other services including street cleaning, leisure centres and libraries.
Claire Kober, chair of the LGA’s resources board, said: “Demand for services caring for adults and children continues to rise but core funding from central government to councils continues to go down. This means councils have no choice but to squeeze budgets from other services, such as roads, street lighting and bus services to cope.”
Kober said that even if councils stopped filling potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they still would not have saved enough money to plug this gap in just two years.
Nervousness in local government about this month’s budget is growing following reports that chancellor Philip Hammond could reduce a planned increase in business rates due in April next year.
The worries have been compounded by the understanding that he will restrict councils’ ability to borrow from the Public Works Loan Board to spend on revenue-generating commercial property.
Government plans to allow local government as a whole to keep all of its business rates income by the end of the decade are in doubt after the government dropped the Local Government Finance Bill, which was passing through parliament before the election.
Kober said: “The government must recognise that councils cannot continue without sufficient and sustainable resources. Local government must be able to keep every penny of taxation raised locally to plug funding gaps and pay for the vital local services our communities rely on.
“With the right funding and powers, local government can play a vital role in supporting central government to deliver its ambitions for everyone in our country.”