Economy and Infrastructure

06.07.16

Expected £1bn drop in council spending casts doubt on sustainability of core services

Councils’ ability to maintain their core services, such as education and cultural initiatives, have come into question as new figures show local government spending is set to fall by 1%, or £0.9bn, in this financial year.

The figures, published today by the DCLG and the Chartered Institute of Public Finance and Accountancy (CIPFA), revealed that the education services will bear the toughest brunt of council cuts, with its 2016-17 budget expected to drop by 2.2%, or £765m – although a part of this “reflects the shift of local authority schools to academy status, rather than a direct loss of funding from the Department for Education”.

The second most significant fall will be in cultural services, with a drop of almost 6% (£145m), as fire and rescue services trail behind with a drop of 1.3% in spending (£28m).

Just two areas of spending are set to increase, both pertaining to social care: adult services will see an influx of £308m (a 2.2% rise), and children’s spending will grow by £136m (a 1.8% rise).

Overall, regional council spending is set to reduce in all areas of England apart from Yorkshire and Humber. Greater London will see the biggest drop in spending (3%), followed by the East Midlands (2.7%) and the north east (2.2%).

As previously revealed by CIPFA, local authorities are also digging into most of their cash reserves, which, at £21bn, are already down 1.5% on the year before. Over £17bn of this has been earmarked for specific purposes, such as a £2.3bn provision for schools, £174m for public health – which a survey had already warned would significantly deplete existing savings – and almost £15bn for other areas of future local spending.

CIPFA’s chief executive, Rob Whiteman, argued the “battering” councils have taken so far will only get worse. He added that while most people welcome the shift of resources towards social care, this rise in spending actually showed “demand is inexorably rising as the population ages”.

“These figures demonstrate the extent to which councils are suffering, without even taking into account the fiscal consequences of leaving the EU,” Whiteman said. “Given that a Brexit may only compound the pressures, it is essential that local authorities undertake a thorough assessment of their financial resilience.

“CIPFA has developed an assessment method that will tell councils whether they are on track to balance their budgets. Crucially, it will also give the latest in best practice to ensure local authorities can overcome the future challenges.”

Whilst today’s figures cast significant doubt on the viability of essential council services going forward, they come as no surprise: in February, councils had already warned they were anticipating dipping into reserves, as well as having to hike charges and cut frontline services in this financial year.

Comments

There are no comments. Why not be the first?

Add your comment

related

public sector executive tv

more videos >

latest public sector news

Leeds’ Clean Air Zone Plans Suspended for the foreseeable future

19/08/2020Leeds’ Clean Air Zone Plans Suspended for the foreseeable future

Leeds City Council have today (August 19) announced that their plans for a Clean Air Zone within the city may not have to go ahead due to lower e... more >
Apprenticeships on the rise across London boroughs

19/08/2020Apprenticeships on the rise across London boroughs

According to recent statistics by London Councils, apprenticeships directly created by London boroughs are up 14% on the previous  year. ... more >
Colleges set to receive £200m in Funding

19/08/2020Colleges set to receive £200m in Funding

Over 180 colleges are set to receive a share of £200m, in order to repair and refurbish buildings and campuses. The funding makes up p... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been th... more > more last word articles >
Leeds’ Clean Air Zone Plans Suspended for the foreseeable future

19/08/2020Leeds’ Clean Air Zone Plans Suspended for the foreseeable future

Leeds City Council have today (August 19) announced that their plans for a Clean Air Zone within the city may not have to go ahead due to lower emissions during the lockdown period. The coun... more >
Apprenticeships on the rise across London boroughs

19/08/2020Apprenticeships on the rise across London boroughs

According to recent statistics by London Councils, apprenticeships directly created by London boroughs are up 14% on the previous  year. Between April 2019 and March 2020, London boroug... more >

the raven's daily blog

Cleaner, greener, safer media: Increased ROI, decreased carbon

23/06/2020Cleaner, greener, safer media: Increased ROI, decreased carbon

Evolution is crucial in any business and Public Sector Executive is no different. Long before Covid-19 even became a thought in the back of our minds, the team at PSE were looking at innovative ways to deliver its content to our audience in a more dynamic and responsive manner. We’re conscious to take the time to both prot... more >
read more blog posts from 'the raven' >

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Being on the receiving end of some “thanks” can make communit... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues that community-led initiatives are a productive way of helping to solve... more >
Aberdeen's green transport fleet attracting international attention

19/06/2019Aberdeen's green transport fleet attracting international attention

Aberdeen City Council’s hydrogen spokesperson, councillor Philip Bell, highlights the Granite City’s determination to play a leading ... more >
A fifth of public sector workers have never received a thank you from the people they serve

13/06/2019A fifth of public sector workers have never received a thank you from the people they serve

A fifth of the country’s public sector workers say they have NEVER received a ‘thank you’ for doing their job as Public Service... more >

interviews

Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need to invest in technology to help make better use of their resources. Bu... more >
Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welcomed a new member to its team. Matt Spencer, O2’s head of public ... more >
New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has outlined his approach to culture and work with employees, arguing tha... more >
Keeping the momentum of the Northern Powerhouse

15/10/2018Keeping the momentum of the Northern Powerhouse

On 6 September, the biggest decision-makers of the north joined forces to celebrate and debate how to drive innovation and improvement through th... more >

public sector focus

View all News