By Richard Johnstone | 12 May 2014
Councils have warned they are reaching the ‘end of the road’ in their ability to manage reductions in government funding, with leisure services, children’s centres and pothole repairs likely to bear the brunt of reductions in the next two years.
The Local Government Association said today the impact of spending cuts on town hall services would become increasingly visible in the next two years, as authorities have to make £10bn of reductions – the same amount that has been taken out of budgets in the last three years.
In many areas, this will place councils on the verge of a tipping point where they will not have enough money to meet all their statutory responsibilities, the group warned after undertaking a survey of spending plans.
According to the poll, three in five councils said 2015/16 would be the year when either there would be no further efficiencies to be made, or the amount would not be enough to tackle that year’s cuts.
Around 40% of the 73 councils that responded to the poll said they would be looking to stem the impact of cuts by raising more income through investment, fees and charges, including for leisure services. Leisure was the area likely to be most hit by reductions, with the budget set to fall by 66% by the end of the decade, the poll found.
LGA vice chair Gerald Vernon-Jackson said it was testament to councils’ resilience that many people have so far noticed little difference in most local services.
‘Faced with the biggest cuts in living memory, councils have restructured and shared services where it has been possible and have made the most efficient part of the public sector even more efficient. However, efficiency savings cannot be remade and we are now reaching the end of the road,’ he said. ‘Local authorities have strived to shield residents from the impact of cuts, but with another £20bn worth of savings to be found, we’re approaching a tipping point where options are fast running out. The next two years will be the toughest yet for those who use and rely upon the popular local services councils provide.’
He highlighted that almost half of councils (48%) are set to use reserves as a short-term fix.
These are set aside for emergencies and long-term investments, but will be needed just to balance the books over the next two years, he added.
‘This short-term fix will delay the impact of looming cuts, but it will store up further difficulties in the long-term as reserves run dry.
‘We need to find a better way to ensure public money gets to the frontline where it is most needed and doesn’t get lost in the maze of Whitehall. Otherwise we risk sleepwalking into a situation where an upturn in the economy coincides with a decline in public services.’
