22.07.15
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.”