Economy and Infrastructure

26.02.18

LGA: Councils under ‘severe funding pressures’ – and tax rises will not save services

Councils have warned that they will have to reduce services in the coming year despite an increase in the level they can charge for council tax and the use of the social care precept.

Nearly every authority in the country with social care responsibilities has plans to implement the 3% precept, which is expected to generate more than £500m in additional funding, but the LGA says the money is just not enough to deal with “severe funding pressures.”

A majority of those councils will also look to increase general council tax by 2.95%, the upper limit of what can now be charged without a referendum, and, while this is also going to raise nearly £600m across the country, central government cuts and an increase in costs due to the living wage will mean councils still see a reduction in funding.

LGA chairman Lord Porter, who sits no PSE’s Editorial Board, said many councils are being left with no choice but to ask residents for greater contributions or risk losing services.

“The extra income this year will help offset some of the financial pressures they face but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face,” he commented.

“Extra social care funding will be wiped out by the significant cost pressures of paying for the government’s National Living Wage and extra general council tax income will only replace a third of the central government funding they will lose this year.”

LGA figures show that more than 40% of councils are considering both raising council tax and implementing the social care precept, meaning residents would see a rise of 5.9% to their bills.

Porter, who appeared in the last issue of PSE, also used the opportunity to call for the government to speed up plans to allow authorities to retain 100% of business rates.

Communities and housing secretary Sajid Javid announced in December that he would be dropping targets to implement 100% retention by 2020 and instead look to bring in 75% retention with the rest still going to central government.

It is not the first time the LGA has asked the government to deal with business rates as an answer to funding pressures, but Porter argued the situation had now become urgent.

“To maximise the potential of local government and protect local services from further cuts, funding gaps must be properly addressed and local government as a whole must be allowed to keep all of the business rates it collects locally each year to put it on a sustainable footing,” he added.

Top image: Joe Giddens

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.

Comments

There are no comments. Why not be the first?

Add your comment

 

public sector executive tv

more videos >

latest public sector news

Midlands council saved £1.5m through combatting tenancy fraud

21/06/2018Midlands council saved £1.5m through combatting tenancy fraud

Tenancy fraud cost Solihull Council almost £1.58m last year, according to recent figures. A report presented to the council’s audit ... more >
Local government funding cuts threaten half of bus routes

21/06/2018Local government funding cuts threaten half of bus routes

Almost half of all bus routes in England are under threat due to partial or incomplete subsidies from councils, the Local Government Association (L... more >
London council demands credit card details by email

21/06/2018London council demands credit card details by email

A London council is reviewing its data protection precautions after it was revealed that residents were told to share payment card detail via email... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
Midlands council saved £1.5m through combatting tenancy fraud

21/06/2018Midlands council saved £1.5m through combatting tenancy fraud

Tenancy fraud cost Solihull Council almost £1.58m last year, according to recent figures. A report presented to the council’s audit committee revealed that, since April 2017, 17 coun... more >
Local government funding cuts threaten half of bus routes

21/06/2018Local government funding cuts threaten half of bus routes

Almost half of all bus routes in England are under threat due to partial or incomplete subsidies from councils, the Local Government Association (LGA) has warned. According to the LGA, ongoing f... more >

the raven's daily blog

The work of the vanguards can help overcome the challenges of integrated care

29/05/2018The work of the vanguards can help overcome the challenges of integrated care

Following the announcement of the second wave of integrated care systems (ICSs), NHS Providers, the NHS Confederation, NHS Clinical Commissioners (NHSCC) and the LGA reflect on how lessons learnt by members from across the four organisations – that have designed and worked together as part of the vanguards – will support the j... more >
read more blog posts from 'the raven' >

comment

Grenfell, one year on

18/06/2018Grenfell, one year on

In the year since the Grenfell Tower disaster, the LGA has been working tirelessly to ramp up fire safety regulations and ban ‘desktop&rsqu... more >
Brexit's long shadow over devolution

18/06/2018Brexit's long shadow over devolution

The EU Referendum and the stop-start Brexit negotiations have left a looming shadow of uncertainty over devolution in the UK, writes Anthony Sala... more >
Decisions, decisions

18/06/2018Decisions, decisions

The true social value of procurement comes from asking challenging questions and thinking outside the box, argues Melissa Bell, sustainable procu... more >
Finding the balance

18/06/2018Finding the balance

Douglas White, head of advocacy at the Carnegie UK Trust, evaluates the risk-benefit relationship of data sharing within the public sector, highl... more >

interviews

Data at the heart of digital transformation

03/04/2018Data at the heart of digital transformation

SPONSORED INTERVIEW Grant Caley, UK & Ireland chief technologist at NetApp, speaks to PSE’s Luana Salles about the benefits of movin... more >
GDPR: The public sector scarecrow

03/04/2018GDPR: The public sector scarecrow

SPONSORED INTERVIEW PSE’s Josh Mines chats to Martin de Martini, CIO of Y Soft, about what the General Data Protection Regulation (GDPR)... more >
Keeping London safe

05/03/2018Keeping London safe

Theo Blackwell, London’s first-ever chief digital officer (CDO), speaks to PSE’s Luana Salles about the role he plays in ensuring the... more >
BIM: Digitising the public sector

19/02/2018BIM: Digitising the public sector

PSE’s Josh Mines talks to Stephen Crompton, CTO at GroupBC, and Stuart Bell, the company’s sales and marketing director, about how Bu... more >

public sector focus

  • 12/06/2018G-Cloud 10: small changes, big opportunities

    Rafael Cortes, Foehn head of marketing, explains how G-Cloud 10 should be a catalyst for innovative solutions and not a source of complacency. It was...
  • 04/06/2018Targets and tribulations

    David Willett, corporate director at The Open University, walks us through the university’s research into the apprenticeship levy, as well as...
  • 30/04/2018The legacy of Grenfell

    PSE’s Seamus McDonnell looks at the reactions of councils and the government to the Grenfell Tower fire, from the immediate aftermath to the...
View all News