Latest Public Sector News

06.11.13

LGA calls for ‘stable environment’ for councils

Councils need a period of financial stability to plan for huge cuts to their budgets, the Local Government Association (LGA) has warned ahead of the Autumn Statement.

Chancellor George Osborne is due to set out the update to government finances on 4 December.

Local authorities have to find £10bn of savings in the next two years, and the LGA stated that some will not have enough to meet their statutory responsibilities. It is calling for the Treasury to reverse plans to withhold an extra £1bn of local government funding in 2015/16.

Local government should also collectively retain full growth in the local share of business rates without a corresponding reduction in grant funding.

LGA chairman Sir Merrick Cockell said: “The next two years are make or break for many councils and the Chancellor has it in his power to either deliver a stable environment in which they can plan for the unprecedented challenges ahead, or he can deliver uncertainty and risk which will put even more stress on vital local services and push councils toward failure.

“This Government is testing the resilience of councils to breaking point and in many areas the cracks are starting to show. 2015/16 is shaping up as the crunch year and we expect some councils to be placed in a position where they do not have the money they need to meet their statutory obligations.

“The severe and unprecedented squeeze on funding is already going to reduce by 66 per cent the money available for some of the most highly visible and popular services council provide. The Government must not exacerbate that problem by deepening the cuts in the Autumn Statement. Councils need a period of stability and consistency so they can plan for the unprecedented challenges which lie ahead.”

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