Latest Public Sector News

14.02.19

Councils ‘left on life support’ as 97% set to raise taxes and half dig into reserves

Around 97% of councils plan on hiking up council this year and over half plan on dipping into their reserves as under-pressure authorities increase cuts to vital services, new figures reveal.

A national survey from the Local Government Information Unit (LGiU) has revealed that three quarters of councils are increasing council tax by the maximum amount, which is 3% in most areas, in 2019-20.

Children’s services and education was found to be the number one financial pressure for the second year running ahead of adult social care, which is still under severe demand pressures.

The figures are based on 158 responses representing 123 of the English local authorities, and over half of councils surveyed said they plan on using their reserves this financial year. Even more worryingly, 40% plan on using their reserves for two years running.

Whilst not named in the report, some councils which have already revealed tax increases include cash-strapped Northamptonshire and Gloucestershire County Council as well as Oldham, Cornwall, and Oxford councils.

Despite soaring council tax charges, the LGiU’s report found that cuts were increasingly visible, and after a 40% cut in central funding, eight in 10 councils said they were not confident in the sustainability of local government finance.

With half of authorities feeling cuts are now “negatively affecting relationships” with locals, LGiU’s chief executive Jonathan Carr-West said councils are being left with no option but to adopt these “drastic measures” in order to balance budgets.

“We know that council funding is broken,” Carr-West commented. “Councils are making do by increasing council tax as much as they can, increasing charging and dipping in to their reserves.”

The annual survey reported that one in 20 councils said they were concerned funding cuts were so deep they would struggle to deliver the legal minimum level of services, and 80% have no confidence in the current model.

“Now more than ever we need a thriving, resilient local government sector to weather the storm of national uncertainty, but years of chronic underfunding has left local government on life support,” added Carr-West.

Richard Watts, chair of the LGA’s resources board, said the survey illustrates the “severity of the challenges” facing local authorities and emphasised that the upcoming Spending Review would be make-or-break for vital council services.

Image credit - Joe Giddens/PA Wire/PA Images

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