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

Leeds sets out plan to become one of world’s first zero-carbon energy economies

17/12/2018Leeds sets out plan to become one of world’s first zero-carbon energy economies

Leeds City Region is aiming to become one of the world’s first zero-carbon regions as it sets out a new energy strategy to meet the Paris C... more >
Council mergers: taking local government by storm

17/12/2018Council mergers: taking local government by storm

It’s no secret that councils up and down the country are scrambling to keep services afloat as they try to balance dwindling resources with... more >
National Social Value Conference 2018: Going upstream

17/12/2018National Social Value Conference 2018: Going upstream

PSE’s Daniel Broadley reflects on the key messages to take away from this year’s National Social Value Conference, which took place o... 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 >
Leeds sets out plan to become one of world’s first zero-carbon energy economies

17/12/2018Leeds sets out plan to become one of world’s first zero-carbon energy economies

Leeds City Region is aiming to become one of the world’s first zero-carbon regions as it sets out a new energy strategy to meet the Paris Climate Agreement and provide a boost to the region... more >
Council mergers: taking local government by storm

17/12/2018Council mergers: taking local government by storm

It’s no secret that councils up and down the country are scrambling to keep services afloat as they try to balance dwindling resources with growing demand. In line with the ‘doing mor... more >

the raven's daily blog

Don’t let a culture of resistance take hold of your organisation

17/12/2018Don’t let a culture of resistance take hold of your organisation

If we want to introduce change throughout local government, then we have to encourage our people to buy-in, writes Danny Longbottom, director of local government and health at BT. In my role I have the privilege of meeting lots of people in local government across the UK. More often than not, the subject of digital transformation crops up... more >
read more blog posts from 'the raven' >

comment

Council mergers: taking local government by storm

17/12/2018Council mergers: taking local government by storm

It’s no secret that councils up and down the country are scrambling to keep services afloat as they try to balance dwindling resources with... more >
National Social Value Conference 2018: Going upstream

17/12/2018National Social Value Conference 2018: Going upstream

PSE’s Daniel Broadley reflects on the key messages to take away from this year’s National Social Value Conference, which took place o... more >
LGA Autumn Budget round up

17/12/2018LGA Autumn Budget round up

Chairman of the LGA Lord Porter puts the chancellor’s Autumn Budget under the microscope and looks at what it means for local government. ... more >
The digital buying community is live

12/11/2018The digital buying community is live

Many of the requirements from buyers posted on the Digital Marketplace were either non-compliant or poorly worded, which resulted in challenges f... more >

interviews

Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welcomed a new member to its team. Matt Spencer, O2’s head of public ... more >
Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need to invest in technology to help make better use of their resources. Bu... more >
New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has outlined his approach to culture and work with employees, arguing tha... more >
Keeping the momentum of the Northern Powerhouse

15/10/2018Keeping the momentum of the Northern Powerhouse

On 6 September, the biggest decision-makers of the north joined forces to celebrate and debate how to drive innovation and improvement through th... more >

public sector focus

View all News