The latest Spending Review, the first since 2015, will set the budgets across government for the next three years and comes at a crucial time for many local authorities.
Since 2010, core government funding for councils has decreased by £15 billion. Despite the fact we have seen savings through efficiencies, these reductions – combined with rising demand for vital services – have put increasing pressure on local authorities. The LGA’s analysis estimates there will be a funding gap of at least £8 billion by 2024/25, assuming things just stay as they are.
The impact is being seen across the country, with councils having to make difficult decisions in key areas such as adult and children’s social care, as well as housing. Other day-to-day services, such as planning and transport, have had funding reduced by between 30 and 50 per cent, according to a report by the Public Accounts Committee.
Part of the challenge faced by councils is that they need to make decisions around services for the long term when funding is agreed in three to five-year packages, creating uncertainty, particularly in the final year. Complicating the picture is the fact that, from April 2020 – the beginning of the new Spending Review period – there will also be changes to council funding resulting from further business rates retention and the Fair Funding Review. With less than a year until these changes come into effect, there is a lack of clarity not only on how much funding will be available, but also on how it will be distributed – or even the means of delivery.
The LGA is calling on the Government to invest urgently in local services in the 2019 Spending Review. In particular, it’s vital that local government has sustainable funding that provides the resources councils need to deliver local services.
The challenges facing local authorities in the coming years cannot be overstated. Not only do we have an ageing population, but demand in other areas, such as public health and protecting vulnerable children, is rising. This can mean it becomes harder for councils to deliver services aimed at prevention.
However, it’s precisely these services that mean local government has a key role to play in helping to tackle many of the issues facing the nation. With the right funding and powers, councils can continue to lead their local areas. They can improve residents’ lives and reduce demand for public services, such as the NHS, or pressures on the police, while at the same time saving money for the taxpayer.
Over the coming months, the LGA will be working with key government departments to ensure that the importance of sustainable local services is recognised. Alongside this, the Housing, Communities and Local Government Committee has launched an Inquiry into Local Government Finance and the 2019 Spending Review. In its evidence to the committee, the LGA will again be highlighting the real challenges facing councils across the country and the value that they can bring with appropriate funding.