EXCLUSIVE: Funding red flags raised

By Dan Peters | 06 February 2018

One in 10 council bosses fear their local authority will not have enough funding to fulfil their statutory duties in 2018/19, an exclusive survey has found today.

The annual local government finance survey, carried out by The MJ and LGiU think-tank, comes days after Conservative-run Northamptonshire CC was forced to impose a section 114 order restricting spending at the cash-strapped authority – the first for nearly 20 years – with sector experts warning it was unlikely to be the last.

Red flags over the future delivery of statutory services were raised by survey respondents largely from counties and unitaries under both Conservative and Labour control.

But one chief executive said: ‘The real issue is how many councils are in the same position and just don’t know it? They may be sleepwalking or in denial.’

The anonymous survey also found eight out of 10 respondents were either not at all confident or not very confident about the wider sustainability of local government finance.

Local Government Association chairman, Lord Porter, said: ‘This survey highlights the financial pressures facing local services next year and concerns about the funding cliff-edge we have warned councils face at the end of the decade.

'It shows councils continue to work hard to try to protect vital services but, with core central government funding to councils being further reduced by half over the next two years, setting budgets for 2018/19 remains a huge challenge for all of them.’

Shadow local government secretary, Andrew Gwynne, added: ‘These findings show that after almost eight years of cuts, councils are facing unprecedented pressures to balance their books.

‘There’s now a widespread consensus, across the political divide, that how we fund local public services desperately needs reform, but the Government does not appear to be listening to the sector.’

The survey of council chief executives, leaders, and finance directors and portfolio holders found a ‘total lack of clarity’ on the long-awaited fair funding review was forcing some to bank reserves.

However, two-thirds said they would have no choice but to dip into their reserves this year while nine out of 10 said their authority would be forced to increase council tax and charges to make ends meet.

President of the Society of Local Authority Chief Executives, Jo Miller, said: ‘Demand is rising and there is no sign of that abating.

'We are exhausting the limits of efficiency.

'You cannot have a single misstep – it’s so tight.’

LGiU chief executive, Jonathan Carr-West, added: ‘Councils are on the edge.

'The system is unsustainable and needs far more fundamental reform than is presently on offer.

'It’s simply not acceptable that we don’t know how local government will work post-2020.

‘Councils are calling for assurances around funding for the next three years and for a fundamental redesign of the finance system.

'At present, Government is offering neither.

'That has to change.’

And head of local government at trade union Unison, Heather Wakefield, said: ‘Local government finance needs a root and branch review.

'Local government workers are keeping services going against the odds.’

In a marked shift from last year’s survey, respondents indicated that children’s services and education was now the greatest immediate pressure facing councils.

The proportion of upper-tier respondents picking this option shot up from 14% last year to 57% while those choosing adult social care dropped from 79% to 37%.

President of the Association of Directors of Children’s Services, Alison Michalska, said: ‘Due to the statutory nature of child protection councils must spend in this area even where there is no budget to do so.

'Money therefore has to be redirected from other vital services, further impacting on the range and reach of services and support available to children and families.’

The Government has insisted it will ‘ensure that local authorities have sufficient resources to provide necessary services to their communities’.

For an analysis of the finance survey figures click here

comments powered by Disqus
Budgets and efficiency Whitehall Finance Local Government Association Politics Legal Chief executives SOLACE ADCS Gary Porter Unions LGiU

Coronavirus Update


In light of the ongoing coronavirus crisis, some of you may not be able to receive your copy of TheMJ magazine. If you’d like to change your delivery address, please contact our subscriptions department at customer@hgluk.com
Read The MJ for free

Keep up to date by subscribing to our daily newsletter

theMJ products