By Richard Johnstone | 24 February 2015
The next government must give local authorities long-term financial settlements focused on providing enough funding for services such as adult social care to ensure they are sustainable, a group of urban councils has said.
The Special Interest Group of Municipal Authorities warned that statutory provision, which also includes refuse collection and planning, were under threat due to cuts in central government funding.
The group, which represents 45 urban authorities, also backed calls for an independent body to oversee the local government finance system.
This should also include the development of a new calculation for establishing the true base cost of delivering statutory services and the removal of the council tax cap, Sigoma chair and Barnsley Council leader Sir Steve Houghton said.
The coalition had failed to recognise the consequences that successive cuts over two spending rounds have had on many of the poorest communities, he said.
‘Urban authorities like Liverpool and Manchester, who have some of the greatest demand for services, will face cuts of up to £52m in core funding in 2015/16. At the same time more affluent councils with lower service demands have seen their budgets grow.’
The Protecting vital services: A fair and sustainable funding model report said a new independent body to determine local authority funding would allow government to fairly distribute cuts so core services were not under threat. The current system has placed little emphasis on the level of funding required by each local authority to provide statutory services in favour of incentives based on central government priorities, Houghton said.
This is both unfair and unsustainable, he added, as authorities that have already had to deal with a large amount of funding reductions are forced to find greater efficiencies to maintain services than more prosperous areas. ‘With the few simple changes outlined in our report, stability could be brought back to local government funding and people would no longer have to face the increasing uncertainty over essential services that rely on locally-raised income,’ he added.
However, responding to the report, local government minister Kris Hopkins said the government had ‘rebalanced’ the funding system for councils so town halls can keep more of what they earn through business rates and the New Homes Bonus, and are less reliant on grants from Whitehall.
‘We continue to deliver a fair settlement to every part of the country – north and south, rural and urban, city and shire – and the truth is councils have continued to balance their budgets while public satisfaction with services has been maintained,’ he added.
‘Every bit of the public sector needs to do its bit to pay off the inherited deficit, including local government, which accounts for a quarter of all public spending. Therefore town halls should focus on delivering sensible savings while protecting frontline services for local taxpayers and keeping council tax down.’
