Inflation’s a concern for councils and residents

By Sir Stephen Houghton | 01 February 2022

After the 2021 Spending Review, when we warned that the new funding for councils would struggle to match inflationary pressures, the rate of Consumer Prices Index (CPI) was 4.2% – the highest since 2011. The rate has now climbed to 5.4% – the highest rate for 30 years and is predicted to climb further.

While the settlement allocation did mean that more deprived councils did slightly better than average for the first time in a decade – which was very welcome – such a level of price increase presents a challenge to councils with their budgets still recovering from a decade of austerity that has seen a £14bn real terms cut and where poorer areas, with a higher reliance on Government grants and reduced ability to raise local revenue, have seen disproportionate cuts.

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