Latest Public Sector News

12.11.18

Less for less: the risk of 'core offers'

Source: PSE Oct/Nov 2018

As councils across England struggle with their finances in the face of massive cuts from central government, Simon Edwards, director of the County Councils Network (CCN), assesses the risk of ‘core offers’ becoming the norm.

After difficult budget discussions, we have seen several stories in the press on the financial situation facing councils up and down the country – with in-year cuts, overspends, and spending controls all outlined.

No doubt these are testing public meetings for many of our member councils, but what could have been previously considered as a couple of outlier examples is rapidly becoming the norm. This has left local government in the unusual position of being a staple of the national news agenda this summer. Whilst comparisons to Northamptonshire fit the narrative, they are overly simplistic.

The warning signs for local government funding have been there for a while, and the situation is being exacerbated with further grant reductions against a growing demand for services. Sir Amyas Morse’s recent comment that councils are only able to deliver “less for less” rings very true.

CCN’s recent research has shown that our member councils collectively face a £3.2bn funding gap by 2020, of which £1.8bn is due to projected demand, and the vast remainder due to inflation.

Whilst this gap will be met, it will be at the expense of local services. Last month, our members warned that they will have to outline another £685m in savings and cutbacks to balance their budgets next February and, worryingly, a further £233m needed to balance budgets has yet to be identified. Several councils have recorded significant in-year overspends already this financial year.

Yet it’s not just county councils that are struggling; this summer has seen stories on the precariousness of Torbay Council and Birmingham City Council. Local government on the whole faces a £7.8bn funding gap by 2025 that, even if filled, will only keep services standing still.

It is in this context that three big-ticket domestic policies from the government take on huge importance for the future of public services: the Spending Review, the Fair Funding Review, and the social care green paper.

CCN, alongside the LGA, has been leading calls for an injection of extra resource for local government to avoid truly draconian cutbacks to local services. A recent CCN survey of our councils found that two-thirds of county leaders believe they will be unable to set a balanced budget in 2020-21 if no new money is available to local authorities. The Spending Review provides government the perfect opportunity to address these fears.

Secondly, the green paper provides the opportunity to re-shape the care service system so it is sustainable in the short, medium, and long term. CCN’s own report this summer backs a cap on care to protect individuals from huge care costs, outlines the need for extra money to offset demand, and calls for a preventative focus and renewed emphasis on community-based care.

Last but not least, the Fairer Funding Review has elicited much hope and expectation that the system of financing local government will be updated. Our member councils are clear that they believe the current system to be unfair, opaque and outdated, and it does not recognise the higher costs of delivering services in rural settings. CCN figures show that counties will receive £182 per head in core grant funding in 2018-19, compared to £482 per head for councils in London.

Our member councils argue that their higher council tax base is a product of years of underfunding and masks the underlying unfairness of the system; with some London boroughs charging half the average shire county tax bill, there is the suggestion that county residents are in effect subsidising services enjoyed by those in affluent parts of the capital.

There is a lot to play for, and CCN will be at the forefront of setting out solutions and ensuring that the communities secretary has clear evidence to make a persuasive case to the Treasury for new funding.

Our chairman, Cllr Paul Carter, warned last month that “the elastic can be stretched no further.” If our members’ warnings are not heeded, the elastic will break – with dire consequences for the communities our councils serve.

Top image: georgeclerk

 

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