Councils to pare back to core services as late settlement bites again
0Councils have reacted with dismay to today’s provisional Local Government Finance Settlement, which outlined an 8.8% cut from central government funding for next year.
The settlement, unveiled today, means that the overall reduction in core government funding to councils has now dropped by 40% since 2010.
According to the Local Government Association (LGA), this year’s announcement will leave councils needing to save a collective £2.6bn from budgets in 2015/16.
LGA chair David Sparks said: “Councils have spent the past four years finding billions of pounds worth of savings, while working hard to protect the services upon which people rely.
“But those same efficiency savings cannot be made again. The savings of more than £2.5 billion councils need to find before April will be the most difficult yet.”
He added that the public now faced library closures, deteriorating roads and scaled back social services.
Hackney mayor Jules Pipe, chair of London Councils, said the settlement did nothing to improve an already bleak outlook for local government finance.
He said: “There are multiple pressures on budgets as demand for services rises and funding falls away.
“Boroughs have already made massive efficiency savings and will continue to do so.
“However, we are approaching a situation where only the most essential services will be viable with little remaining for valued amenities that boroughs are not legally obliged to provide.”
Announcing the settlement today, local government minister Kris Hopkins did not refer to the 8.8% cut, preferring to refer to what he said was 1.8% reduction in “spending power” for councils.
The LGA does not accept that figure as reflecting reality, because it includes ring-fenced money given to councils for specific purposes, such as public health and joint working with the NHS.
In his statement to Parliament, Hopkins said: “As planned, we have kept the overall reduction to 1.8% – lower than last year and one of the lowest levels of reduction under this government.
“If we include the funds that government has provided to support local transformation, the overall reduction is even lower – at 1.6%.”
Hopkins added that there would be a cap on spending power losses for any individual council of 6.4%, which he said was the lowest level of this Parliament.
In addition, Hopkins said all nine authorities eligible for Efficiency Support Grant in 2014/2015 (Great Yarmouth, Burnley, Chesterfield, East Lindsey, Barrow-in-Furness, Bolsover, Hyndburn, Pendle and Hastings) will have these amounts incorporated into the settlement for 2015 to 2016.
A grant to support rural authorities has been increased to £15.5m.
In addition, the government has earmarked an amount relating to local welfare provision in each upper-tier authority’s general grant, totalling £129.6 million nationally.
However, Sparks criticised the latter move because it means that the government will not be providing extra funding for welfare.
He said: “Instead of providing separate money for councils to help the vulnerable, government has instead suggested that councils will have to find this money from existing budgets, at a time when these are being cut by more than £2.5 billion.
“This would be robbing Peter to pay Paul, and would effectively amount to an additional £130 million cut for other vital services like fixing the roads, collecting the bins and caring for the elderly.”
