Ambitions to rewire the state and boost good growth across the
country will only succeed if the Government confronts the
financial crisis facing councils and local services and
turbo-charges genuine English devolution, the Local Government
Association (LGA) says today.
The Prime Minister has set out ambitions for fiscal devolution
and widespread devolution to local areas with new powers over
skills, transport, employment support, housing, innovation and
public services. A white paper is expected following the Autumn
Budget detailing the reforms in full.
The LGA is working with councils and strategic authorities to
help shape the white paper to ensure proposals are genuinely
deliverable and can succeed.
In its Autumn Budget submission, the LGA, which represents local
authorities across England, says councils support government's
commitment to deliver meaningful devolution across England.
However, it is clear that councils the constituent bodies of
strategic authorities also need access to the powers and funding
to deliver vital services and prosperity for residents, including
any areas currently without mayors or strategic
authorities.
The full value of local government will only be realised if both
strategic and local authorities are empowered and financially
sustainable. Financially vulnerable council sector risks
undermining the value and contribution of strategic authorities.
The LGA said under pressure council finances also have
implications for residents and the services they use and rely on
every day. It could mean longer waits for adult social care
assessments, rising homelessness, and cuts to neighbourhood
services including road maintenance, libraries, parks and waste
collections.
Councils have seen some funding growth in recent years, while a
much-needed multi-year funding settlement has improved councils'
financial certainty. However, despite already delivering billions
in savings and efficiencies since 2010/11, councils still face a
£7 billion funding gap by 2028/29, and one in five councils with
social care responsibilities required Exceptional Financial
Support from Government to set a balanced budget for 2026/27.
The LGA said councils desperately need an increase in overall
funding to stem the emerging risk of system-wide financial
failure and to ensure that councils can meet demand for the vital
services needed by their communities and play a lead role in
inclusive growth and service reform. Specifically, the LGA is
calling for Government to:
- Deliver meaningful fiscal devolution by ensuring that the
fiscal roadmap, to be published with the Autumn Budget, and the
subsequent white paper include both revenue retention and raising
opportunities for councils.
- Introduce a revised approach to Exceptional Financial Support
- a broader response that addresses the underlying cost and
demand pressures facing the sector is needed.
- Deliver on its previous commitments to look at ways to reduce
burdens on local authorities by reviewing sales, fees, charges
and statutory duties.
- Commit to writing-off historic and accruing Dedicated Schools
Grant deficits fully and reconsider the decision to net surpluses
from non-high needs blocks off the deficit.
- Ensure that growing financial pressures on NHS budgets are
not transferred to council budgets.
- Fully fund the costs to councils of the Government's reform
programme for the adult social care workforce, including the
introduction of a Fair Pay Agreement.
- Set out a clear timetable for local government reorganisation
and take steps to ensure councils are not left to pick up the
bill following the recently announced review.
Councils are the engine rooms of good growth, injecting £117
billion annually into local economies. Through the services they
provide, their work on producing local economic and industrial
strategies, and their crucial convening role, councils are
ideally positioned to shape planning, transport, skills,
infrastructure and investment.
Yet without the measures set out in the LGA submission, councils
may struggle to provide the firm, local bedrock needed to ensure
that prosperity is both generated and shared across
communities.
Cllr Eamonn O'Brien, Chair of the LGA,
said:
The Prime Minister is right to identify that the imbalance
between national and local government is holding back growth. But
you cannot devolve power if the foundations are financially
fragile.
If the Government wants national, regional and local growth, it
needs to fix the local foundations first. Strong, capable and
financially sustainable local authorities are essential to
deliver on our shared priorities for health, housing and giving
people every opportunity to thrive where they live.
Genuine devolution needs to reach every part of the country and
every level of local government. Our Autumn Budget submission
sets out how, with sustainable funding and meaningful powers,
local government can deliver the homes, skills, public services
and opportunities for our communities."
