By Richard Johnstone in Manchester | 4 July 201
The Local Government Association today publishedstark details of the impact on future council services of spending cuts, warning that some might be scrapped altogether.
The hole between what councils have to spend, and the need for services such as adult social care, is growing by £2.1bn every year amid government cuts – and is set to reach £14.4bn by 2020, the group said. This was already leading to a host service reductions and tightening eligibility criteria, according to the LGA’s full Funding Outlook Report, published at its annual conference today. It follows warnings earlier this week that 86 councils face a funding gap of more than 15% in 2015/16.
Today’s analysis, which includes the 10% funding reduction for local government that was announced in the Spending Review, stated that the ‘counterproductive’ reductions would lead to increased costs for hospitals, prisons, the police service and welfare system.
Predicted increases in demand for statutory services, such as adult social care, means the money available for other functions, inlcuding school support services and road maintenance, would fall by almost half between 2010 and 2020. Overall spending on non-statutory services across local government would be £14.3bn by the end of the decade, down from £26.6bn in 2010/11, the report found.
LGA chair Sir Merrick Cockell said this lack of funding would hit the economic recovery, reducing job opportunities and increasing welfare costs.
‘The looming £14.4bn funding shortfall offers stark evidence that the current way of funding local services is no longer working. We are in danger of losing entirely some services, with significant reductions right across the board,’ he added. ‘This is a false economy which threatens to shunt additional costs onto the reactive parts of the public sector, particularly our hospitals, prisons and welfare system. There are large hidden costs associated with these cuts, which will ultimately leave the taxpayer out of pocket. Whoever forms the next government will need to address this funding shortfall as a matter of urgency.’
Trade union Unison said the analysis showed that local government faced ‘meltdown’. The union’s head of local government ,Heather Wakefield, said hundreds of thousands of jobs had already been lost from the local government workforce due to cuts. ‘Evidence from all economies is that you need a strong public sector to generate growth and a healthy economy, something that this government ignores at its peril,’ she added.
