Councils face £7bn shortfall with proposed departmental cuts

If government departments are made to find up to a further 40% of savings by 2020, local councils could be faced with a £7bn decrease to the local government finance settlement, it has been suggested. 

Responding to the launch of the chancellor’s spending review yesterday, Cllr Gary Porter, chair of the Local Government Association (LGA), said that councils have already made £20bn in savings since 2010 following reductions in government funding of 40% and have worked hard to shield residents from the impact. 

“A 25% real terms reduction to the local government finance settlement would mean a decrease of £4bn by 2020 while a 40% reduction would mean this rises to £7bn,” he said. 

Yesterday it was announced that chief secretary to the Treasury Greg Hands MP was to write a letter to government departments asking them to draw up plans to find the billions of pounds in cuts. And departments would be required to model two scenarios – 25% and 40% of ‘savings’ – within their resource budgets in the next four years (in real terms). 

Cllr Porter, who is also leader of South Holland District Council, warned: “For many councils, there are few efficiencies left to be made and these alone will not be enough to cope with further funding reductions. Vital services, such as caring for the elderly, protecting children, collecting bins and filling potholes, will struggle to continue at current levels.” 

He added that adult social care in particular is still facing a funding gap that is growing by at least £700m a year, a situation that is going to get worse. 

“If our public services are to survive the next few 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,” he said. 

“Fairer funding for local services, and the freedom to pay for them, will allow councils to tackle the big issues facing their residents and protect services which bind our communities together and protect our most vulnerable.”


C. Melsom   23/07/2015 at 11:33

Just yesterday the following was reported: quote:- An overwhelming majority of local authority chief executives believe there is still scope for further efficiencies in their councils, with a third naming all departments followed by back office and social services: end of quote.. I am still of the opinion that there are lots of cuts still available to councils and the pips aren't squeaking yet.

John Hull   23/07/2015 at 12:15

I can't speak for all departments, but Consumer Protection nationally is way past the "pips squeaking" phase, and in many authorities is essentially non-existent, leaving the most vulnerable consumers with no protection at all, and the risk of serious harm increasing across the board.

Eric Firth   23/07/2015 at 13:52

I read with total disbelief the aledged quote from C Melson, the pips in many authority have squeacked their last. Services have been decimated and there is still more to come. Methinks C Melsom ought to be on the John Bishop show, although as a comedian he wont get many lauaghs

John Irvine   23/07/2015 at 21:58

Unfortunately the 'cuts' aren't spread out evenly across the country! Perhaps that is why some Councils feel they have room to do more. In the North East the effect is already being felt and more cuts will surely have a detrimental effect on frontline services. Areas like ours spend much more on looking after the elderly and the unfortunate than many in the favoured South. In order to do that, libraries are closing, community centres too. We have already lost our local sports centre! Grass is not cut as often, the roads are patched up and we must be one of the few counties who doesn't have a three lane motorway. What was someone saying about 'pips squeaking?

Nick Heirons   24/07/2015 at 10:42

Must agree with John Hull. Consumer Protection is now being left to the media and local authorities can no longer afford to provide the effective controls they used to. This is to the detriment to everyone except the rogue traders

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