Councils in England face extra cost pressures of almost £8bn by 2024/25 just to keep vital local services running at today’s levels, analysis by the Local Government Association (LGA) has warned.
In analysis published ahead of this month’s spending review, the LGA has said that due to new and emerging challenges that councils are having to deal with, vital services such as care for older and disabled people and homelessness prevention face an uncertain future.
The LGA said the significant financial pressures facing local services cannot be met by council tax income alone.
To illustrate the scale of these extra demand and cost pressures facing councils, the LGA projects council tax income would need to rise by a quarter over the next three years to pay for them.
The LGA’s detailed submission to this month’s Treasury Spending Review is calling for the Spending Review to provide councils with a multi-year settlement that provides sufficient additional government funding and certainty to meet growing cost pressures and existing challenges.
Doing so, it says, would enable councils to plan local services more efficiently and help reduce pressures on the rest of the public sector.
According to the LGA, the spending review also presents an opportunity to reset public spending “in a way that is fit for the future, flexible to allow the delivery of local priorities, and empowers councils to deliver on the ambition to level up our communities that central and local government share”.
Ongoing Community Investment Fund
To reduce pressures on local authorities, councils are calling on the government to use the spending review to create an ongoing Community Investment Fund, worth £1bn in 2022/23.
This un-ringfenced fund could be used by councils to invest in supporting individuals, strengthening communities, and tackling priorities in their local areas, including health inequalities, the LGA says.
The LGA says its submission “is not just about money”, but also sets out how devolving and empowering local government in areas such as education, special educational needs, and disabilities (SEND), skills, and planning can deliver more value for residents and communities.
Commenting on the analysis, LGA chair James Jamieson said: “Councils continue to face severe funding and demand pressures that will stretch the local services our communities rely on to the limit.
“Securing the long-term sustainability of local services must therefore be the top priority in the spending review.
“If we are to come out of this pandemic with a society that is truly levelled up, the vital services that councils provide must be at the heart of it.
“Councils need certainty over their medium-term finances, adequate funding to tackle day-to-day pressures, and long-term investment in people and transforming places across all parts of the country to turn levelling up from a political slogan to a reality that leads to real change for people’s lives.”
He continued: “Levelling up has to also mean a radical reset of the relationship between central and local – building back better means building back local.
“With adequate resources and freedoms, councils can continue to provide local solutions to the national challenges we face and ensure all of our communities are able to prosper in the future.”
Notes on the analysis
LGA analysis estimates the average increase in annual cost pressures facing councils of £2.6bn per year to maintain services at their current level of access and quality, meaning that the same services will cost around £7.8bn more to provide in three years’ time.
Of this, £1.1bn per year is related to adult social care (in addition to a pre-existing £1.5bn provider market pressure), £0.6bn to children’s social care and £0.9bn to all other council services (excluding education and police/fire services).
Image: Imran Khan’s Photography/Shutterstock
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