Councils ‘struggling to balance the books,’ with no knowledge of how spending will work from 2020

The Local Government Information Unit (LGiU) has called for an urgent consultation on the future of local government funding following the chancellor’s Spring Statement.

In his speech today, Philip Hammond was positive about the UK economy, reporting that it has grown every year since 2010, with an additional three million jobs, lower unemployment and an increase in wages of almost 7% above inflation since April 2015 for the lowest paid.

Additional spending before the Autumn Budget is unlikely, but Jonathan Carr-West, chief executive of LGiU warned that for some councils that could be too late.

He expressed concerns that if the Chancellor does open up more spending in autumn, he has “no idea where in the queue local government will be.”

“And, of course we still don’t really know how local government finance is going to work after 2020,” he added.

According to research by the LGiU, most councils in England are facing financial struggles, with 95% planning to raise council tax and 93% planning to increase charging to make ends meet this year, and two thirds of councils will reportedly be forced to dip into their reserves.

There is growing concern that Northamptonshire County Council is the “tip of the iceberg” for local government, with 80% of councils fearing for their financial sustainability.

Carr-West said: “So councils are left struggling to balance the books on a day to day basis all while having no idea how many homes they will be able to build and services they will be able to provide beyond 2020.”

He concluded: “That’s why in the run up to the Budget this November, we need an urgent consultation on the future of local government funding: one in which all options are on the table, not just adjustments to the current system.

“LGiU will be arguing for this review through its Local Finance Task Force.

“It’s vital that the Government is willing to listen.”

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