District councils could suffer more from spending cuts, says LGIU

8 Sep 10
Local government experts fear district councils will suffer more from the spending cuts than their metropolitan and county counterparts.
By Jaimie Kaffash

9 September 2010

Local government experts fear district councils will suffer more from the spending cuts than their metropolitan and county counterparts.

Andy Sawford, chief executive of the Local Government Information Unit think-tank, told Public Finance he was concerned about the disproportionate effect of spending cuts on smaller councils.

He said: ‘For a district, the big figures being mentioned [of up to 40% spending cuts] seem more awesome right now than for a county council… It is about where you start from, what your capacity is. For example, if a district council stopped capital building projects or vehicle replacement schemes, it would save £100,000 to £200,000 – for a county, this will be more like £10m.’

District councils’ smaller budgets and more limited services meant less scope for savings, he added. They might mean the councils would be able to do little more than provide their primary functions. Ancillary services supporting Prime Minister David Cameron’s Big Society would have to be cut.

Grahame Lucas, head of financial services at Worcester City Council and president of the Society of District Council Treasurers, told PF that the effect of spending cuts on district councils would only become clear when the local government settlement is announced.

However, he added: ‘There is a fear among district councils that we are the lower priority areas and therefore will get a higher proportion of grant cuts. Balancing that, district councils’ proportion of grant funding in comparison to gross spending is less than other councils because we have a higher level of local income. But this is all speculation.’

Lucas said there was ‘a risk’ that districts had less capacity to bring about transformation. But this should intensify collaboration between district councils.

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