Whoever Is Our Next Prime Minister, Their Focus Must Be Our Local Government Funding Crisis

Councils are staring at a £51.8billion funding black hole over the next six years. This can no longer be ignored.

Every day last year, councils in England’s counties received on average 66 requests for adult social care. This amounted to 870,000 requests over 365 days.

When talking such huge numbers, it is easy to forget the individual nature of each request. Behind every number, there is a person, and their own story.

It could be someone who can no longer live independently in their own home, or it could be someone who has dementia and requires nursing care. It could be someone young, with a severe learning disability that need 24-hour care of professionals.

At the other end of the age spectrum, those same councils last year received, on average, 19 referrals to children’s services a day. These are often vulnerable children who require the care of the council for their own safety. In total, county local authorities received 250,000 referrals to its children’s services in 2017/18.

Those councils pride themselves on being able to offer the care and support our most vulnerable young and elderly need, but it gets harder each year – demand has almost doubled in both care services over the last decade.

A combination of funding cuts and growing demand means that county local authorities face the largest pressures and the most risk to their sustainability.

The County Councils Network’s (CCN) new analysis released today shows the challenge facing not only county local authorities, but every council across the country.

We asked PwC to analyse the situation facing councils by 2025; based on how much funding they are set to receive, compared to the rising demand for local services.

The report’s conclusions are stark – councils face a £51.8billion funding black hole over the next six years. Remember: this is on top of the significant savings those authorities have already made. Make no mistake, the scope for making more savings dwindles each year.

This funding gap must be filled; if not councils will be unable to balance their budgets.

Every way of addressing this funding gap has an impact on residents. Many local authorities will have little choice but to raise council tax, and raise it by the maximum each year, for the foreseeable future. It is therefore hard to see a time when councils don’t elect to raise their local rates.

As residents ending up paying more for less, it is important to note that the report shows that council tax is not the solution, and far from it: yearly rises over the next five years will not eradicate even half of the funding gap facing councils.

Authorities can also seek to introduce or raise charges for certain services, but even major increases will only yield a very small proportion of income to eradicate the funding gap. Separately, how much a council can raise depends on where they are located. For example, councils in central London can raise much more in parking charges than other areas.

With other options exhausted, further cuts to local services will likely be required. Our councils have today warned that they their finances face ‘disarray’ and many will resort to delivering the ‘basic’ local services.

This is not overblown conjecture; this is the reality facing many well-run local authorities.

It means that many ‘nice to have’ but still essential services, including those focused on prevention, will all but disappear; and residents could expect further reductions in the likes of library services, Sure Start centres, community services, streetlights, and recycling centres, as increasingly money is channelled towards crisis care services.

There will be little money left to support economic growth, housing and infrastructure; further contributing to spiralling housing costs for young people.

That is why our councils today are making a concerted plea for more resource in the government’s Spending Review – they are aware there isn’t a huge amount of public money to go around but quite simply the elastic for many well-run councils cannot be stretched much further.

If there is no funding made available, then we need to ask what should residents – and government – reasonably expect from councils?

By 2025, four fifths of the average county local authority’s budget will be spent on just four services: adult social care, children’s services, special educational needs, and public health.

With a leadership contest looming large on the horizon, today’s report and the plight of local government should give food for thought for any future prime minister. It is an issue that can no longer be ignored.

Simon Edwards is director of the County Councils Network


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