Chancellor Kwasi Kwarteng may have back-tracked slightly on his mini-Budget, but is sticking to his growth plan, leaving local residents and their councils counting the cost to their own wallets.
The Government’s fiscal plans triggered soaring mortgage rates, and at the time of writing the Prime Minister is not ruling out real-term benefits cuts. So can councils keep on keeping up with the cost of living pressures their residents face?
Councils began responding in a host of ways as the crisis began to unfold this year. Mayor of Newham LBC Rokhsana Fiaz launched the Newham Cost of Living Crisis Response at a summit last month and Gateshead MBC has worked with partners to create a network of 60 warm spaces. Other initiatives include a £5m plan by Wandsworth LBC to support a range of approaches including £1m for the Wandsworth Discretionary Social Fund, and West Berkshire Council has set up a new cost of living support hub on top of a £694,000 household support fund and a £100,000 emergency cost of living fund.
But local authorities are trying to keep on providing services and support beleaguered communities in the face of massive funding gaps, and a cancelled Spending Review. Last week District Councils’ Network (DCN) research revealed their councils are threatened by a £900m funding gap across 2022-23 and 2023-24.
The DCN says these budget pressures would make it much harder for their councils to keep the preventative services they run going – at precisely the time when need is greatest. Sixty-six per cent of respondents to their survey said they are considering reducing community support and resilience services, 37% are considering cutting back welfare support, and 20% are considering a scaling-back of homelessness support.
Speaking to The MJ, DCN vice chair and finance spokesperson and leader of Stevenage BC, Cllr Sharon Taylor says: ‘Districts had proved through the Covid crisis it was our services supporting our communities on the front line that helped get our residents through that really dreadful period, and we’re not fully recovered from that yet. We needed a bit of breathing space, and now we’re faced with a cost of living crisis.’
On the approaches being taken by districts, she says: ‘Many of our councils have done what I’ve done here in Stevenage. I’ve set up a cost of living taskforce, we’ve been both looking at what the council can do, but also working with partners to see how we support our community through the cost of living crisis. This is through a range of advice and support, but also with some real practical help such as warm spaces and financial MOTs for people who are struggling with their finances, working with our partners in Citizens’ Advice and the Money Advice Unit in Hertfordshire.’
She emphasises the need to prioritise this crucial role in supporting communities alongside the fact that ‘at the same time, districts are the real engine room of economic development in our areas’.
‘In the context of not knowing what’s going to happen with the economy, we’re trying to make sure we’re supporting our residents through the cost of living crisis at the same time as making sure we do what we need to do to develop the growth that’s needed for the future to get the economy back on its feet after the Covid crisis. So we have multiple challenges, and the financial one is a really big one.’
Inflationary pressures at Stevenage BC over 2022-2023 and 2023-2024 will be £3.08m, she points out. ‘That shows you the scale of the challenge.’
She says her council doesn’t know if it is going to have enough funding in the future to deliver services ‘such as community support resilience services, the hardship funds, and helping to direct people to services that will support them – domestic violence support, homelessness, and benefits support’.
Homelessness is becoming an increasing issue, with a surge in enquiries since the chancellor’s statement. She says: ‘In the last week I’ve had people emailing me to say their private sector landlords are giving up their properties because they can’t afford to let them out any more. They’re giving them up and putting them up for sale. That’s increasing pressure on our homelessness service.’
The latest £421m round of the Government’s Household Support Fund (HSF) aimed at supporting those most in need to help with significantly rising living costs including energy bills, was made available to county councils and unitaries at the weekend.
An analysis of cost of living initiatives published by the County Councils’ Network shows the HSF has been at the heart of the response. It has enabled Essex CC’s more than £1m ‘lifeline’ fund for food, fuel and furniture. Over the summer Staffordshire CC distributed £5.5m of the HSF, helping almost 30,000 with the costs of food and water, and more than 4,000 of Kent’s hardest-hit households received one-off payments to help cover water and fuel bills from a £1.5m share of Kent CC’s initial round of HSF.
North Yorkshire CC has worked with its district councils to use shared data to identify people quickly and provide supermarket vouchers from the first two phases of the HSF to those in hardship. Assistant director policy, partnerships and communities at North Yorkshire CC Neil Irving tells The MJ the newly-released final guidance to councils for phase three of the HSF has removed the previous ringfences on who is entitled to help – a step called for by Centre for Progressive Policy.
But he reveals that significant obstacles lie in the path of councils trying to get money into the right residents’ hands, as the Department for Work and Pensions (DWP) has not provided North Yorkshire CC with data on those who are receiving support. ‘We use Searchlight, their system that enables local authorities to look up the individual benefits records of claimants. There’s a big challenge with that as you have to access everyone’s record individually to see whether or not they received any extra help from DWP.’
Mr Irving calls this ‘totally impractical, as we have a county population of 600,000, and there’s no way you could trawl through hundreds of thousands of records trying to spot people’. He says North Yorkshire is still looking at how to approach the issue, ‘working with our district councils, who obviously have data around things like council tax support, which we have used previously’.
What councils need, he says, is ‘access to DWP data [in order] to know who is receiving payment from DWP, and secure data transfer of that. We could then match it with the data we’ve got and focus on the people who weren’t getting help from the DWP.’ He adds that ‘the issue has been raised through the CCN, and we’ve also been raising it with DWP directly. We’ve had a number of liaison meetings.’
Councils are undoubtedly stepping up to the mark, but it remains to be seen if their efforts will be enough to protect the most vulnerable, given the sector’s own financial difficulties, and a seeming lack of a joined-up approach by central Government to target those most in need of help.
See www.themj.co.uk/Cost-of-living for more details of the support councils are offering to residents during the cost of living crisis
