The current position of local government funding

By Mick Scrimshaw on July 11, 2018

Take our "5 Minute Survey"

Tell us what you think

The cross-party Local Government Association has just produced a report highlighting the huge gap of funding for councils across the country and the risk to vulnerable people and local services this represents.

This is of particular interest to us in Northamptonshire as the Government are forcing local government reorganisation on us in response to the failings of Northamptonshire County Council due to their financial mismanagement and poor policy decisions.

Splitting the county into two big unitary councils is being held up as the answer to our problem. However, without addressing the fundamental lack of funding that nationally all councils face it will do little to help us. We have seen the County Council cut services, sell assets and raid their reserves just to try and scrape by. Unless there is a fundamental change, the new councils will simply take on the county's debt and start life with an in-built deficit and have no choice but to cut services, sell assets and raid their reserves thereby putting at risk the services currently protected from the County Council by the Boroughs and Districts.

The report states:

“By 2020, local authorities will have faced a reduction to core funding from the Government of nearly £16 billion over the preceding decade. That means that councils will have lost 60p out of every £1 the Government had provided to spend on local services in the last eight years. Next year, 168 councils will receive no revenue support grant at all

According to our previous funding gap analysis, in just one year between 2016/17 and 2017/18 councils had to absorb a funding shortfall of £2.4 billion. This means that, as well as the pressures on adult and children's social care, other council services will have also received unavoidable reductions. Councils now spend less on early intervention, support for the voluntary sector has been reduced, rural bus services have been scaled back, libraries have been closed and other services have also taken a hit. In the face of these increasing pressures, councils have been forced to draw on their financial reserves.

Our new analysis shows that local services face a funding gap of £7.8 billion by 2025.

This represents the difference between the costs of funding services at the same standard as in 2017/18, against funding that we estimate will be available to do so. This gap corresponds to keeping local authority services ‘standing still’ and only having to meet additional demand and deal with inflation costs. It does not include any extra funding needed to improve services or to reverse any cuts made to date.

Reduced funding also means reduced capacity to invest in prevention. Ultimately this means worse outcomes for struggling children and families, more people with acute needs that must be met, reduced social mobility and a negative impact on the health of our population. If councils do not receive additional funding, difficult decisions will have to be made about which services to cut back on.

The failure to properly fund these services puts the wellbeing of some of the most vulnerable residents at risk, and this cannot go on.”

Full details can be read by clicking here.

Mick Scrimshaw is the Leader of the Labour Group at Kettering Borough Council, the Shadow Cabinet Member for Finance at Northamptonshire County Council. He has a public record of standing up for Kettering as a County Councillor for the Northall division in Kettering, Northants and since May 2015, a Borough Councillor for the William Knibb ward. He is a keen cyclist and also runs a family business with his wife.

Related Posts

Click to access the login or register cheese crossmenuarrow-downarrow-right