Spending by UK local government is headed for a near 70 year low a new report reveals, writes Bill Tanner in 24 dash housing.
“Research by APSE (Association for Public Service Excellence) and NPI (New Policy Institute) indicates that low – not seen since 1948 – could be reached within the next five years.
Related statistics suggest that if current trends continue, council tax – until recently a minority source of local government finance – will account for at least half the money coming in to all English local authorities by 2020.
For shire counties, it will account for three quarters.
Also outlined is a scenario by which the revenue support grant being mainly confined to metropolitan and unitary districts and London boroughs with that five year time frame – which means that shire counties and districts will be almost entirely reliant on council tax and business rates.
The research found that whilst recent settlements mean the more deprived authorities will not see significant further decreases in funding by 2020, a new dimension of inequality is opening up according to how strongly an authority can grow its business rate income.
Dr Peter Kenway, lead research author from NPI, said: “The new financial framework for local authorities breaks the link between need and source funding. There are no guarantees that ability to raise business rates will match needs in the most deprived areas”.
APSE chief executive Paul O’Brien said: “With huge funding pressures on local councils this report highlights the hidden costs of decline in council finances. Whilst new funding for social care is of course welcome, the overall picture for local council finances remains grim. Without adequate funding we risk abandoning liveability services like parks, refuse and recycling, highways, and street lighting to long term decline.”
As an alternative, the report advocates a sustainable future for liveability and public realm services.
Allowing liveability services to decline through a lack of funding will force up ancillary care demands at a neighbourhood level, reveals the report; it is focused on helping local government understand the next few financial years and reflects the announcements in the chancellor’s spending review, including the social care precept, full business rate retention, and changes to council tax.
Also explored is the precarious financial position placed upon frontline services.
A series of recommendations calls upon councils to ensure sufficient future funding for frontline services, recognising the impact of such services on the quality of life for local residents, and providing good places for businesses to locate.
The research was produced by drawing upon analysis of local government financial information and data and two round-table discussions comprising of local government finance experts, APSE members, councillors, and third sector and union representatives. “