As the country moves further into the cost of living crisis, there is a severe threat t the services provided by local councils. With even more cutbacks on the horizon, Chairman of the Local Government Association, Cllr James Jamieson, has urged the Chancellor to take action before it is too late.
With the Chancellor preparing to make his Autumn Statement tomorrow (17th November), all of the councils that responded to a survey by the LGA revealed that they are facing additional cost pressures that weren’t included in their budgets for the year. The main takeaways from the survey are:
- Councils are experiencing additional pressure financially, with increased risk from inflationary pay pressures and energy price increases.
- Action is being planned to meet the cost pressures, with 88% of councils planning to use reserves to meet the demand. 75% are planning to underspend in other areas to accommodate increased pressure.
- There is an average additional cost pressure of £19.1 million for councils that have social care responsibilities. These are county councils, unitary, metropolitan and London borough councils and it is equivalent to 5.6% of budgeted net revenue expenditure for the year.
- District councils that are responsible for the delivery of services such as planning and waste and recycling collection are reporting an additional average cost of £915,000 which equates to 6.4% of their budget expenditure for the year.
The LGAA has said that the Chancellor must use the Autumn Statement to make sure that councils are allocated adequate funding so that they can provide the services that are not only relied upon by residents, but they have a legal obligation to provide such as children’s services and adult social care.
Chairman of the Local Government Association, Cllr James Jamieson, said:
“Local government remains the fabric of our country but many of the vital services we provide face an existential crisis. Inflation is not going to come down overnight; reserves can only be spent once and a local service cannot be cut twice.
“Rising demand for service – and the extra costs to provide them – means that even having the same funding next year as they had this year would leave councils having to make significant cuts to services, such as care for older and disabled people, protecting children, homelessness prevention, leisure centres and bin collections.
“The Government undeniably faces a challenge to get the public finances back on a stable footing, but it needs to urgently come up with a long-term plan to fund local service.
“While council tax is an important funding stream, it has never been the solution to the long-term pressures facing councils, raising different amounts in different parts off the country – unrelated to need – and adding to the financial pressures facing households.
“Only with long-term funding certainty to cover increased cost pressures and invest in local services, can councils make innovative and meaningful decisions over their finances, change lives and communities for the better, alleviate pressures on other parts off the public sector, support growth and save local services.
“Local government wants to work with central government to develop a long-term strategy to deliver local service and growth more effectively. Alongside certainty of funding, this also needs wider devolution where local leaders have greater freedom from central government to make decisions on how to provide vital services in their communities.”