Counties likely to slash frontline services next year to balance budgets

20 Sep 18

English county councils will cut frontline services next year as they try to make savings of nearly £1bn, an umbrella group has warned.

With central government funding for councils due to fall again in 2019-20, increasing numbers of county councils may have to strip services back to a ‘core offer’ or be unable to balance their budgets, the County Councils Network said today.  

The umbrella-organisation estimated councils will have to make savings of £685m along with a further £233m of ‘unplanned’ frontline service cuts, in its response to the consultation for next year’s local government settlement.

As pressure on social services grow, expenditure to areas such as roads, libraries, economic growth service and bus routes were likely to be cut, the CCN, which represents all 27 county councils in England, said.

Nick Rushton, CCN finance spokesman and leader of Leicestershire County Council, stated: “County councils across the country have no choice but to find a further £1bn of savings next year.

“Choices will be limited and reductions to front line services inevitable:  with valued services such as pothole and highway repairs, children’s centres, libraries and increased charges for residents all, on the agenda.”

The £2bn three-year boost handed to social services by chancellor Philip Hammond in the Spring Budget last year finishes in 2020, the CCN pointed out in its a response to the consultation, which ended on Tuesday. 

The 13 county councils that chose to increase council tax (the social care precept) by 3% over 2 years rather than 2% over 3 years - which the government allowed councils to do, starting this financial year – will lose that ability to raise extra cash for social care after 2019-20, the CCN added.  

Rushton added: “There is not enough money today to run vital services.

“Next year there is even less from the drop in government funding, expiry of the social care grant and the ending of the social care precept for some councils.

“We will have to once again ask our residents to pay, but we are at the point where council tax rises alone are not going to protect services.”

The group called for an “immediate injection of new resources” following the end of the adult social care grant in 2020. 

The District Councils Network in its response to the consultation objected to proposed changes to raise the threshold of the New Homes Bonus.

Through the scheme, the government incentivises councils to give planning permission and allow housing growth by matching any extra council tax revenue raised from new-built homes, conversions and long-term empty homes brought back into use.

In the consultation document, the Ministry of Housing Communities and Local Government suggested the threshold should be raised because it did not “reward those authorities who are the most open to growth”.

But the DCN said districts should be “rewarded and not punished for delivering more homes whilst facing the biggest cut in their spending power than any other type of council”.

Sharon Taylor, DCN member board lead for sustainable finance, said it would create a “perverse incentive by reducing the reward for those local communities that have embraced additional new homes”.

The introduction of a NHB baseline of 0.4% in 2017-18 removed more than £70m in funding from district councils, the network of 200 local authorities said.

The Local Government Association also warned against raising the NHB threshold, in its own response to the consultation.

“This would risk putting the brakes on housebuilding schemes and growth-boosting projects at a time when our housing shortage is one of the biggest challenges facing the nation and it would further exacerbate the financial challenges facing some councils,” the organisation said.

The LGA also called on the government to scrap the requirement for councils to hold a referendum if they are to raise council tax above a certain level, and said this is an “unnecessary and costly burden”.

A Ministry of Housing, Communities and Local Government spokesperson said: “Our funding settlement gave a real terms increase in resources for local government in 2018-19.

“Local authorities are responsible for their own funding decisions, but over the next two years, we are providing councils with £90.7 billion to help them meet the needs of their residents.”

Councils including Torbay, Somerset, Northamptonshire and East Sussex have already outlined major savings to balance their books.

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