Latest Public Sector News

04.08.14

Council spending per head falls by 30% since 2010

Council spending will have fallen by nearly 30% per capita in real terms over the course of the current parliament, an analysis of expenditure by the Department for Communities and Local Government and the Chartered Institute of Public Finance and Accountancy (CIPFA) has revealed.

The data, complied as part of the 2014-15 Revenue Account Budget Estimates return, highlights that council spending will have fallen back to the level of 2005-06 in cash terms.

The cash reduction in per capita spending between 2009-10 and 2014-15 is 14.5%, but, taking inflation into account, the figure is 29.1%.

The analysis also revealed that local authority spending in 2014-15 will fall in all regions across England, compared with the previous year, with councils in the north east (-5%) and east Midlands (-4.1%) facing the biggest reductions.

Rob Whiteman, chief executive of CIPFA, said that many authorities have managed their budget reduction well and continue to live within their means.

“But we are now starting to see some councils face real and immediate financial pressures,” he said. “‘If we are to prevent the financial failure of vulnerable local authorities, we must recognise that some councils have been hit harder than others and will need more support. But also that there is a real and pressing need for fundamental reform of the financing of local government if we are to see it not just survive but succeed and thrive over the coming years.”

CIPFA has calculated that the biggest fall in budgeted spending is housing, where councils have reduced funding by 7.8%, followed closely by education, although much of the 7.6% cut to spending is likely to be related to schools converting to academies, removing their funding from local authority control.

In contrast, funding for children’s social care will increase by 16.4% over the year, while public health will rise by 5.5%.

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