Responding to a report by the National Audit Office on the
financial sustainability of local authorities, , Chairman of the Local
Government Association, said:
“This stark report sets out the significant funding challenges
facing all councils and the effect years of unprecedented funding
reductions have had on the local services our communities rely on
and other parts of the public sector. It is yet further
compelling evidence as to why the Government must urgently secure
the financial sustainability of local government and the 1,300
different statutory duties and responsibilities councils provide.
“Councils in England face an overall funding gap that will exceed
£5 billion by 2020. We have repeatedly warned of the serious
consequences of funding pressures facing local services from
unprecedented funding reductions since 2010 and growing demand
for services. Inadequate funding for local government has a
knock-on effect on other parts of the public sector.
“As the NAO rightly recognises, councils are having to divert
ever-dwindling resources from other local services, including
filling potholes, maintaining our parks and green spaces and
running children’s centres, leisure centres and libraries, to try
and plug growing funding gaps in adult social care and children’s
services. At the same time, they are struggling with cost
pressures arising from government policies, such as paying for
the National Living Wage and Apprenticeship Levy. Leaving
councils to pick up the bill for unfunded government policies at
the same time as managing spending reduction and such growing
demand for services is unacceptable.
“The report also acknowledges the unsustainability of councils
being forced to use reserves to plug funding gaps. As we have
previously said, reserves are designed to help councils manage
growing financial risks to local services and do nothing to
address the systemic underfunding that they face. The size of the
cuts councils are having to make is simply too big to be plugged
by reserves.
“Councils’ ability to maintain local services at a time of
inadequate resources and rising costs is already extremely
stretched, and the NAO rightly warns about the huge uncertainty
over how the Government intends to fund local services after
2020. Core central government funding to councils will be further
cut in half over the next two years and almost phased out
completely by the end of the decade.
“The Government needs to urgently address this cliff-edge and the
growing funding gaps facing local services. It also needs to
provide the financial sustainability and certainty needed to
protect the local services our communities rely on into the next
decade and beyond by committing to allow local government as a
whole to keep every penny of business rates collected.
“Only with the right level of funding and powers, can councils
continue to make a difference to people’s lives by building
desperately-needed homes, creating jobs and school places,
providing dignified care for our elderly and disabled and
boosting economic growth.”
