40% council cuts would be “knockout blow”, warns LGA

21 Oct 15

Implementation of 40% spending cuts to council funding in next month’s Spending Review would deliver a “knockout blow” to many local services, according to analysis from the Local Government Association.

The umbrella group of local authorities has warned that, if the sector was required to make this level of real terms reduction, as much as £10.5bn would be taken from spending. This represents more than all council spending on refuse collection, arts and leisure, road funding, free elderly bus travel, as well as street cleaning and lighting and parks maintenance, it stated on Monday.

The Treasury has told unprotected departments to prepare for cuts in spending of between 25% and 40% over the four-year spending review period.

A 40% reduction to council funding would mean town halls had lost 64% of their grant funding between 2010 and 2020, LGA chair Lord Porter highlighted.

“Councils are under no illusions about the challenge that lies ahead. We know we face almost £10bn in cost pressures by 2020 even before the prospect of further challenging funding reductions over the next four years.  

“What is clear is that another 40% real-terms reduction to local government grant funding on top of these cannot be an option on November 25. It is a false economy to reduce funding to local government while attempting to prop up other departments.”

Porter said that providing councils with fairer funding was the only way to avoid the unintended consequence of other parts of the public sector, such as the NHS, being impacted by cuts to local provision such as social care.

“It would be our residents who would suffer as councils are no longer able to deliver some of their statutory duties, like street cleaning and providing the free bus travel that is a lifeline to our elderly and disabled,” he added.

According to the LGA analysis, a 40% reduction to core grant funding would amount to £8.4bn, while the same reduction to other grants made to council would add £2.1bn.

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