CIPFA is warning that this further erodes confidence in councils’ financial resilience and ability to maintain core services.
In cash terms, the education budget is worst hit, losing £765m or 2.3%, although this is partly explained by a shift toward academies, funding for which will move from local government to the Department for Education.
Cultural services are braced for a 5.8% reduction (£145m) and fire and rescue services for a 1.3% cut (£28m).
However, spending on both adult and children’s social care is set to rise by 2.2% (£308m) and 1.8% (£136m) respectively.
Council reserves are down to £21bn, a 1.5% reduction on last year, and of this amount, £17.3bn is earmarked for specific purposes such as schools and public health.
On a regional basis, spending is set to fall in all regions apart from Yorkshire and Humberside. London will see the biggest fall (-3%), followed by the East Midlands (-2.7%) and North East (-2.2%).
CIPFA chief executive Rob Whiteman said the outlook for councils was getting worse.
“Most people will welcome councils focusing more resources on support for the most vulnerable in society. However, the rise in adult social care spending shows that demand is inexorably rising as the population ages,” he said.
“These figures demonstrate the extent to which councils are suffering, without even taking into account the fiscal consequences of leaving the EU. Given that a Brexit may only compound the pressures, it is essential that local authorities undertake a thorough assessment of their financial resilience.”
Whiteman highlighted CIPFA’s Financial Management Model, which will tell local authorities if they are on track to balance their budgets.
