Latest Public Sector News

26.06.15

LGA claims councils face £3.3bn in funding cuts

Councils in England are facing cuts of £3.3bn in central government funding, the Local Government Association (LGA) has claimed.

The LGA's annual 'Future funding outlook report' warns councils will need to make further significant savings next year, equivalent to 12% of their total budgets.

Using the most recent Office for Budget Responsibility forecasts, LGA analysis predicts councils will see funding for local services reduced by a further 11% in 2017-18 and 4% in 2018-19 before increasing by 7% in 2019-20.

According to the LGA this will leave councils facing a funding gap of £9.5bn by the end of the decade.

The reduction in government funding is expected to be compounded by rising demand being placed on adult social care services.

Spending on social care and collecting waste is expected to continue to absorb a rising proportion of council resources. Funding for other services will drop by 35% by the end of the decade, says the LGA, from £26.6bn in 2010-11 to £17.2bn in 2019-20.

The LGA said the financial challenge facing councils illustrates the urgent need for radical reform of the way public services are paid for and delivered.

LGA chair Cllr David Sparks said: "There are no efficiencies left to be made for many councils while many now warn efficiencies alone will not be enough to cope with further funding cuts. Vital services, such as caring for the elderly, protecting children, collecting bins and filling potholes, will struggle to continue at current levels.

"If our public services are to survive the next years, we urgently need a radical shift in how public money is raised and spent, combined with proper devolution of decision-making over transport, housing, skills and social care to local areas.”

Local government minister Marcus Jones called the LGA's claims "unsubstantiated and premature" as funding decisions are yet to be made.

"Councils have worked hard over the past five years to deliver a better deal for local taxpayers, however, like the rest of the public sector will have to continue playing their part in tackling the deficit to ensure the economic recovery continues," Jones said.

“In the run-up to the Spending Review and next local government settlement we will continue to listen to the views of councils, Local Government Association and others about the best way of distributing funding to achieve fairness, efficiency and local growth.”

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