Local government funding is rarely a major battleground in
election campaigns. This rule appears to be holding in the
current campaign, despite evident pressures in areas like adults’
and children’s social care services, following a decade of cuts
to councils’ funding.
A new IFS observation looks at the plans for local government
funding set out in the Conservative, Labour and Liberal Democrat
manifestos – which differ vastly. Broadly speaking:
- The money allocated by the Conservatives would not be
sufficient to meet rising costs and demands over the next
parliament even if council tax were increased by 4% a year. This
would necessitate a further retrenchment in services, or unfunded
top-ups to the plans set out.
- The has allocated more than
enough money to meet rising costs and demands, allowing
increases in service provision and quality, although not enough
to restore them to 2010 levels. That is true even if council
tax were frozen – although Labour has no plans for such a
freeze.
- The Liberal Democrats have allocated enough money to meet
rising costs and demands if council tax is increased by 2% a year
– although only if some the funding earmarked for bus services,
youth services or homelessness is used to meet these
pressures.
In addition, each party proposes reforms of adult social care
services, including unfunded commitments to relax means-testing
and/or introduce caps to costs. Funding these pledges could
require tax rises beyond those announced, or risk breaking
parties’ fiscal rules.
David Phillips, an associate director at the Institute for
Fiscal Studies said:
"The differences between the parties’ plans for council funding
are stark, and imply vastly different future directions for the
country."
"Taken at face value, the Conservatives plans
wouldn’t meet the rising costs and demands for local services –
necessitating a further retrenchment in services or unfunded
top-ups to the plans set out."
"In contrast, the has allocated more than
enough money to meet rising costs and demands, allowing increases
in service provision and quality, even without council tax
increases – although this isn’t costless, as other taxes would
increase substantially under Labour, and these would not just hit
the top 5%."
"The Liberal Democrats plans sit somewhere in between, allowing
councils to meet rising costs and demands if council tax is
increased by 2% a year – but only if some the funding earmarked
for bus services, youth services or homelessness is in fact used
to meet these pressures."
You can read the full briefing note on our 2019 Election website,
funded by Nuffield Foundation: https://www.ifs.org.uk/election/2019/article/what-do-the-election-manifestos-mean-for-local-government-funding
