Latest Public Sector News

27.01.17

Flawed local government settlement leaves councils at ‘financial tipping point’

The recent local government financial settlement will leave over two-thirds of councils scrabbling for unexpected savings in 2017-18, pushing them towards a ‘financial tipping point’, council chiefs have warned.

As councils prepare to set their budgets for next year, the LGA has urged government to reverse its unexpected reductions to New Homes Bonus (NHB) payments to local authorities, saying that they must find “genuinely new” money to fund social care.

Communities secretary Sajid Javid’s provisional local government settlement last year failed to directly announce any new funding for social care, instead inviting councils to raise their council tax precept up to 3% and announcing a one-off £241m ‘Adult Social Care Support Grant’ (ASCSG) based on the NHB reductions.

Lord Porter, LGA chairman, said: “Councils need government to reverse NHB cuts next year and fund the ASCSG with new money.

“This would avoid councils from having to make deeper than expected cutbacks to local services in 2017-18 and would provide some short-term support to councils providing social care.”

The LGA’s analysis of the four-year-long settlement suggests that 201 councils will miss out on NHB payments due to the government’s decision to raise councils’ qualifying growth baseline to 0.4% in 2017-18, also reducing payments to five years.

Fifty-seven social care authorities are also set to lose out under the ASCSG, losing more in NHB payments than they are set to gain under the grant, according to the LGA.

The Association has said that the measures will not change the fact that councils face a £5.8bn funding gap by 2020, in part due to a £2.2bn cut in Revenue Support Grant, warning that councils cannot plug the gap alone even if they were to cut all of their discretionary services.

“The government must allow local government to use the extra business rates income it will keep to plug this growing funding gap if local services are to stand any chance of surviving the sheer scale of funding cuts and pressures facing them both now and over the next few years,” Lord Porter added.

Norman Lamb, Liberal Democrat shadow health secretary, echoed the LGA’s calls, saying that local councils are being “gradually starved of cash”.

“If these cuts go ahead, vulnerable elderly people will suffer and services will struggle to meet basic needs such as washing, dressing or getting out of bed,” he added.

A DCLG spokesman said that the government is “determined” that councils continue to work well delivering local services while also making efficiency savings.

“Our historic long-term settlement is giving councils nearly £200bn to spend over the course of this Parliament, and we recently increased social care funding so councils have £7.6bn available over four years,” the spokesman said.

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

 

related

public sector executive tv

more videos >

last word

Collaborative working is the key to the future at home and abroad

Collaborative working is the key to the future at home and abroad

David Hawkins, operations director at the Institute for Collaborative Working (ICW), on why ISO 44001 is a new evolution in collaborative working. The past 12 months have seen seismic changes b more > more last word articles >

public sector focus

View all News

comment

An integrated approach to greening public transport

28/04/2017An integrated approach to greening public transport

Dave Pearson, director of transport services at West Yorkshire Combined Aut... more >
Unlocking the combination to criminal justice reform

28/04/2017Unlocking the combination to criminal justice reform

If new mayors want to improve the life chances of their communities, help t... more >

interviews

Maintaining the momentum for further devolution

25/04/2017Maintaining the momentum for further devolution

Ahead of this year’s mayoral elections, Lord Kerslake, the former hea... more >

most read

Shared Services and Outsourcing Week

the raven's daily blog

A watershed moment in British democracy

02/05/2017A watershed moment in British democracy

The upcoming mayoral elections represent a watershed moment in the history of British democracy, reports PSE’s Luana Salles.  On 4 May, voters across six regio... more >
read more blog posts from 'the raven' >

editor's comment

11/04/2017A watershed moment in British politics

The government has now officially triggered Article 50, formally starting the process of Britain’s exit from the EU. How this will affect local government, the wider public sector and the Civil Service remains to be seen, but the likelihood of it being plain sailing with the enormity of the task ahead seems rather unlikely.  It is, therefore, quite appropriate that in this edition of PSE Professor Chris Painter reflects on the profound changes that have taken place in the... read more >