LGA warns of £16.5bn black hole following Osborne’s cuts

9 Nov 15

Local government will face a £16.5bn funding gap by the end of the decade if council funding is cut by 30% in this Spending Review, ministers have been warned.

After the Department for Communities and Local Government reached a provisional agreement to reduce its day-to-day resource spending by this amount over four years, the Local Government Association said a similar reduction to town halls on November 25 would hit services.

LGA chair Lord Porter said he hoped the announcement of an early deal with the Treasury indicated DCLG was looking at ways to absorb some of the funding cuts itself rather than passing them onto local government.

“A similar size reduction to core council funding would leave councils facing £16.5bn in funding reductions and increased cost pressures by the end of the decade,” he added.

“This would have a significant impact on the ability of councils to continue protecting the services communities rely on.

“Government needs to consider the pressure funding reductions to councils would have not just on vital local services but on the public sector more widely.”

Porter highlighted that increasing NHS funding by £8bn over the parliament while social care services remain chronically underfunded would be a false economy.

“Instead, we need to find a new way of working that ensures public money is controlled by local areas who know how best to spend it,” he stated.

“This will not only help us improve services but also help achieve shared local and central government ambitions to boost housebuilding, close skills gaps and grow local economies and relieve pressure on the Exchequer.”

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