Municipals call for chancellor to ease ‘disproportionate’ council cuts
The Special Interest Group of Municipal Authorities (SIGOMA) has called for a greater level of investment in poorer towns and cities to give them the prospect of “real growth” ahead of the government’s Autumn Statement.
SIGOMA has asked the Treasury to ensure that the statement “fairly reflects” the impact of cuts on departmental expenditure and invests in councils so that they can more easily meet the government’s aspirations of local authorities being self-sufficient.
Local authorities have undergone a cash terms cut of 15.7% since 2010. However, this has impacted disproportionately on poorer areas, with the municipal authorities, which SIGOMA represents, having suffered an equivalent cut of 21.1%.
“The headline allocations for departmental spending show a serious and disproportionate continuation of cuts to local government,” said Sir Stephen Houghton, chairman of SIGOMA, who highlighted above-inflation payroll costs from the new National Living Wage (NLW) and redistributions to other departments as among the issues that local councils face.
“At the same time, government is asking authorities to step up to help alleviate pressures on health budgets with better preventative and community based care provision. Government is asking for this ‘transformation of care’ now, but the substantial government funding is years away. We have asked the minister [Phillip Hammond] to address this issue as a matter of urgency.”
According to the IFS, the poorer metropolitan areas that SIGOMA represents are among the worst affected by budget cuts, having comparatively fewer businesses coupled with higher levels of unemployment and poverty.
These local authorities have a higher than average demand for services with lower business rates and council tax, causing particular pressures on services such as adult social care provision and children’s services.
Approximately 10% of the most grant-reliant local councils in the UK have had to cut their spending on services by an average of 33%, compared to the 9% budget cuts faced by the least grant-reliant councils.
“We ask the chancellor and the Cabinet to recognise the wider picture of local government funding,” said Sir Stephen.
“We want to see an Autumn Statement that recognises demand-led costs, puts service provision first and ensures funding is allocated according to service pressures, not income bases.”
In its submission SIGOMA further outlined its desired recognitions in the Autumn Statement, such as acknowledgment of the shifts in departmental finances arising from nationwide efficiency programmes like Transformation of Care or as a result of taxation – for example, the loss of business rates caused by academy conversion.
The submission also called on the government to take into account new burdens imposed by policy such as the removal of the contracted-out rate of National Insurance and the introduction of the NLW.
Between 2010 and 2015, the concentration of the most deprived areas within authorities has shifted further away from London to the regions, with the north west now holding a concentration of more than three times that of London.
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