The Spring Statement leaves local government in limbo

13 Mar 18

Local authorities are running out of cash fast and saying they may get more in the autumn Budget is not helping them, says LGIU's Jonathan Carr-West. 

The message from the chancellor’s ebullient Spring Statement was clear.

It’s good news on the economy, so good that the chancellor could describe himself as “at his most Tigger-ish” and indulge himself in a series of jokes (to be fair, pretty good jokes by the standards of these things).

Rhetorically, it was by far Philip Hammond’s most assured and powerful performance as chancellor.

But before we get too carried away, it was not such good news that the purse strings can be loosened, at least not yet.

If the economy continues to improve Mr Hammond assured us that in the Autumn Budget he would be able to find more money for public spending, but not before then.

So jam tomorrow but no jam today.

So jam tomorrow but no jam today.

But for local government money tomorrow is no solution to a crisis that is happening today.

Councils are running out of money fast.

We have already seen one county council go under and others may soon follow unless the government takes action now.

Local government finance experts privately estimate that half a dozen councils are at risk of being unable to balance their books and a hundred or so are worried about their financial futures.

And of course we still don’t really know how local government finance is going to work after 2020.

So councils are left struggling to balance the books on a day to day basis all while having no idea how many homes they will be able to build and services they will be able to provide beyond 2020.

It’s a positive development that at least councils are being mentioned in these debates, but we have no idea where in the queue local government will be when and if the chancellor does open up more spending in the autumn.

Even though councils account for a quarter of public spending and delivers many key services, such as roads, schools, parks, culture, libraries, youth centres, home care, they have been left in a position where they are unable to prioritise and invest in future without clear vision of responsibilities and level of funding.

Organisations simply cannot operate like this and we would never tolerate this in private sector.

Local government has been left in limbo.

The sector itself has been putting forward ideas about how it can be made financially sustainable but it feels as though no one is listening.

Councils and residents cannot afford to wait any longer - we have already passed the crunch point.

Having heard from council leaders and chief executives across the country as part of the LGiU’s Local Finance Task Force, we see a coherent set of demands.

From government we are calling for:

  • A formal consultation on all the options for the future of local government funding
  • A commitment to maintain a consistent level of funding for 3 years
  • A commitment to cover costs to local government associated with future changes to business rate policies
  • A clear vision for the future of adult social care and devolution, in order to facilitate forward planning and investment

It’s not too late to think and act boldly on local government, but it soon will be.

There was no news today, but I’m afraid that, in this instance no news is bad news.

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