Uncertainty does not bode well for the settlement

By Michael Burton | 14 August 2019
  • Michael Burton

One would hope that with a former communities secretary and an ex-local government minister in charge at the Treasury there might be some understanding, if not sympathy, for council treasurers trying to plan their 2020/21 budgets.

After all, it was only in February that then local government minister Rishi Sunak promised ‘to get more certainty’. In his new job as Treasury chief secretary he is in a better position to provide it.

Or is he? In the current feverish political climate, with talk of no-deal, no confidence votes, an October General Election and money – though check the small print – flooding out of the Treasury coffers every time Boris Johnson opens his mouth, the prosaic matter of local government finance seems to be taking a back seat.

Having a one-year Spending Review was no surprise in the circumstances, but the lack of any indication of next year’s settlement is a concern, especially against the backdrop of a no- deal Brexit in which the £20m for ‘Brexit preparations’ is a drop in the ocean.

Then there are adult and children’s services to fund, questions over the tottering business rates system on which future council revenue is supposed to rely and, of course, the ongoing fair funding review.

Council chiefs will also be aware of the wider picture on the public finances. With the NHS gobbling up much of the cushion created by better than expected public finances there was already little left over for other departments and that was before Boris began spreading his largesse around for NHS capital projects, extra police and more prison spaces.

A weakening economy will further reduce the capacity to loosen the purse strings and the Treasury is likely to become very nervous about even mildly generous council settlements amid such darkening economic clouds.

Unfortunately, as regards any indication of the settlement, no news is not good news.

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