Responding to the Local Government Finance Settlement announced today, Local Government Association Chairman Sir Merrick Cockell said:
“Today’s settlement confirms that councils will continue to be at the sharp end of public sector spending cuts up to 2016, but that government has started to listen to local authorities and made some important concessions without which local services would have suffered.
“The money government gives to councils to run local services will fall by 8.5 per cent over the next two years, but as a result of the Autumn Statement there will not be an additional reduction on top of this.
“At a time when local authorities are contending with the biggest cuts in living memory, the introduction of the Better Care Fund and government’s decision to reverse potentially costly changes to the New Homes Bonus will help the efforts of some local authorities in protecting vital everyday services like caring for the elderly from the worst impact of spending cuts.
“The next two years will be the toughest yet for people who use and rely on the vital everyday local services that councils provide. By the end of this Parliament local government will have to have made £20 billion worth of savings. Councils have so far largely restricted the impact of the cuts on their residents. They have worked hard to save those services that people most value and have protected spending on social care for children and the elderly, but even these areas are now facing reductions. That impact will only increase over the next two years.
“The current public sector model, with its highly centralised control of budgets and spending priorities, is inefficient and will struggle to function in the context of long-term reductions to public spending. It needs to be replaced with a better and fairer way of funding local authorities which delivers adequate money, distributes it fairly and provides the long-term certainty councils need to plan for future demands.
“It is unacceptable that for a second consecutive year, councils have had to wait until the week before Christmas to find out how much money we will have to budget with next year. This prevents local authorities from being able to properly consult with residents and deprives local areas of the long-term certainty needed to run important local services to a high standard. No business would be run in this way. We look forward to the Chancellor delivering on his commitment to provide a longer-term funding settlement for local authorities.”
The 8.5 per cent cut in overall government funding to councils is calculated including the £3.46 billion Better Care Fund which will apply to social care authorities only.
A full analysis of the settlement is now available on the LGA website.