20.03.14
Tough times lie ahead for councils post-Budget, says LGA
Despite yesterday’s Budget not bringing further cuts for local government it has not changed the fact that the next two years will be the toughest yet for people who use and rely upon the services which councils provide, Sir Merrick Cockell, chairman of the Local Government Association (LGA) has stated.
Overall, there was mixed news in the Budget for local authorities. The freezing of the landfill tax rate for 2015, for example, has been hailed as government recognition for all the ‘hard work’ local councils have done to reduce waste sent to landfill by nearly 40% in the last five years.
Cllr Mike Jones, chairman of the LGA’s Environment and Housing Board, said the landfill tax has achieved its goal of diverting waste from landfill and should be subject to a long-term freeze. It stands to raise the Treasury over £600m from taxpayers in 2014/15. This money should be returned to local taxpayers to be invested back into recycling and waste projects that will support local jobs and growth, rather than being used to boost government funds.”
The government has also committed to enabling local councils to help more families access the Troubled Families programme earlier.
Cllr David Simmonds, chairman of the LGA’s Children and Young People Board, added that the LGA will now look to work with the government on the details to ensure that there is as little bureaucracy around the programme as possible so that councils can continue to lead the process and concentrate their efforts on helping families.
He also stated that the Chancellor’s plans to provide greater investment into apprenticeships will be a significant “key” to helping more young people into the world of work.
However, the £200m pothole repair fund, which will be available to local authorities as part of a bid process, has come under fire from the LGA.
The Association stated that the country is facing a 42% increase in traffic on local roads by 2040 and there is already a £10.5bn backlog of road repairs.
Cllr Tony Ball, vice chair of the LGA's Economy and Transport Board, explained: “The situation is getting worse every year because of a £500m annual funding shortfall. This announcement does not go anywhere near far enough.
“We urge government to provide a full and comprehensive package, including the resurfacing of roads, rather than funding in dribs and drabs.”
The LGA, which represents almost 400 councils in England and Wales, has also welcomed the extra £140m government funding for flood victims but warns it will take "some time" before the total cost is known.
Help and support provided by councils includes: the bolstering of flood prevention plans to protect homes and businesses; the provision of resources to help repair damaged roads; the offering of grants to assist residents and firms during the clear-up; and the creation of flood warden networks to monitor local rivers and streams.
Therefore, George Osborne’s announcement of a £140m flood fund, which comes on top of a previously announced £130 fund, comes as good news. However, Cllr Jones warned: “While it is good news the government has announced wide-ranging funding, the total cost of the damage from flooding will take some time to estimate. It is imperative this financial support is sufficient enough to cover the final bill.”
Sir Merrick, chairman of the LGA, also noted that “by next year, central government funding for councils will have been cut by 40% during this parliament. As the economy improves, people will increasingly start to question why councils are having to reduce and withdraw from providing the services that underpin their daily lives”.
“If we are to avoid an upturn in the economy coinciding with a decline in public services, we need nothing less than a fundamental reform of the way the public sector works and an honest reappraisal of how public services are provided and paid for in post-austerity Britain,” he concluded.
Paul Dossett, head of local government at professional services firm Grant Thornton, said: "Local government has been one of the hardest hit parts of the public sector, with central government funding having been cut by 40% over the current parliament. In the run up to the Budget, sector bodies, such as the LGA, the Core Cities Group and the County Council Network, all called for greater certainty on future funding to support effective and sustainable strategic planning. The provision of this certainty was absent in the Chancellor’s speech. With only 40% of planned spending cuts currently in place, many parts of the public sector will continue to face significant challenges.
"Billed as a 'budget for a resilient economy', the Chancellor announced that public finances will move into surplus during 2018/19, but that additional cuts will be required. However, he provided no further detail – other than a cap on welfare spending – as to where the axe will fall beyond measures already announced.
"There was some good news for some localities in relation to well-trailed infrastructure projects, including Barking Riverside, Brent Cross and the new garden city at Ebbsfleet as part of a series of measures designed to increase the building of 200,000 new homes and wider regeneration investment. This, along with other transport and infrastructure support, could go some way in offering affected councils a bit of relief.
"More broadly, local government's Budget wish-list largely fell on deaf ears, with no certainty on the future revenue funding of local government provided by the Chancellor, and uncertainty remaining over potential additional funding reductions beyond 2015/16. There will of course be some trickle-down impact as a result of the increased infrastructure spending announced by the Chancellor, but the long-term outlook of local government revenue funding remains highly challenging, and the resilience of some local authorities remains uncertain."
Nick C Jones, director of PwC's government and public sector division, said: "We should remember that it will still be deep into the next Parliament before we can say that the books have really been balanced and that the years of fiscal austerity are over. For those in the public sector, therefore, recession will continue for the foreseeable future. Cuts will accelerate further in the next few years, although the Chancellor’s cap on welfare is an attempt to avoid all of the pain being felt by central government departments.
"Reform and affordable government remain the mantra. At the same time, public sector wages are being constrained, posing further challenges for engaging staff and increasing public sector productivity. And there remain some big unanswered questions such as whether ring-fencing protection for health, schools, international development and pensioners can really be maintained."
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