Councils all around us and throughout the country are on the verge of bankruptcy and the County Council is having to make hard choices to cut funding and services to maintain a balanced budget.” [Devon County Council]
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Today’s Daily Mail asks if YOUR council is about to go bust – following a survey which shows “half of local authorities are on the edge of disaster – despite pumping up council tax and slashing services”:
More than half of senior council figures are warning their local authorities are likely to go bust over the next five years, a shock survey has found. A survey of council leaders, chief executives, chief finance officers and cabinet members for finance found 51 per cent fear bankruptcy in the next parliament without funding reform. Nearly one in 10 (9 per cent) of those surveyed also said they were likely to declare effective bankruptcy – by issuing a Section 114 notice – in the next financial year.
“In common with other councils, we are in complex and continuing negotiations with the Government about how they support us.” [John Hart, Leader, Devon County Council]
There is the general complaint that local government finance is delved out unfairly, with rural councils receiving substantially less than urban ones; and, besides, “whilst councils are set to see a 6.5% increase in funding this year, rising costs mean this won’t stretch that far, the real pain will hit from 2025 on”.
However, as part of the agenda for this month’s council meeting, looking at an earlier recommendation from cabinet on Austerity and Cuts to Local Government Funding, the following was recommended to full council:
The Chancellor’s Autumn statement has set the country on course for a “more painful” austerity drive after the next general election, after more than a decade of austerity starting under David Cameron and George Osborne.
The £20bn package of tax cuts is almost entirely funded by swingeing real terms reductions to public spending planned from 2025 when it may not even be in government according to the IFS. It is estimated that the NHS receives 20% of its funding from National Insurance. The plans to cut National Insurance means that some funding for social care and the NHS will have to come from other budgets or general taxation. This implied a 1.8% cut for unprotected budgets each year from 2024-25 to 2028-29 – including for prisons, the courts system, local government and further education.
After taking into account funding settlements for Scotland, Wales and Northern Ireland, the plans imply cuts of 3.4% in England. This Council has had more than 50% of its budget cut since 2010 and is already again planning to cut services to bring in a legally balanced budget for 2024-5.
Economists doubt efficiency gains on such a scale can be achieved. Councils all around us and throughout the country are on the verge of bankruptcy and the County Council is having to make hard choices to cut funding and services to maintain a balanced budget.
This Council resolves: 1. To write to the government to ask them to make no real time cuts to Local Government until it has undertaken a spending review. 2. Seek the support of the LGA to oppose the Chancellor’s budget for Local Government
