News

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 news

View all News

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... 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 feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

interviews

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 ... more >

the raven's daily blog

Utilising data to best deliver meaningful public services

14/11/2019Utilising data to best deliver meaningful public services

Public Sector Executive’s Matt Roberts explains how living in a modern, interconnected world, as we do, means public sector organisations cannot afford to ignore the rol... more >
read more blog posts from 'the raven' >

public sector events

events calendar

back

February 2020

forward
mon tue wed thu fri sat sun
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 1
2 3 4 5 6 7 8

featured articles

View all News