Editorial....6th February, 2020
Now’s the time when local councils are setting their budgets and offer varying degrees of explanation for the austerity measures imposed by Westminster.
“Unprecedented financial challenges,” said Tory-controlled Staffordshire’s finance chief, trying to soften the blow of cuts imposed by his own party; “simply unacceptable” and “councils deserve better” said a more objective local government expert this week, commenting on a survey report that makes sober reading.
In fairness to the Tories, prior to the local elections this column looked at policies for all the major parties and none planned to bring back big grants for local authorities. Goodbye revenue support grant, hello more local taxes. Cheshire East got some stick when it bought a B&Q site to generate revenue, but it’s the future.
The Local Government Information Unit, a think tank that carries out the annual survey, said that “alternative funding models” — ie local people paying for things that were previously free — was largely supported to varying degrees and is thus likely to be what we see happening.
Half of the councils replying (46%) favoured local income tax with 40% liking the idea of more freedom to levy other local taxes. A local share of the new digital tax was favoured by 38%, a tourist tax by 36% and a local share of corporation tax by 31%. Presumably you can expect increased fees in all areas that are chargeable, from parking charges to the cost of burials.
In more general terms, nearly all councils (97%) planned to increase council tax in 2020/21, with most (93%) planning to raise it by more than 1.5%.
Nearly all councils (97%) planned to increase fees and charges, with some being forced to raise them “by the maximum possible amount” (14%).
More than half of councils (57%) plan to use their reserves this year; most of these (74%) also used their reserves last year.
Most councils (86%) said that exploring other sources of income, aside from council tax and business rates, was a “high priority or essential” — hence Cheshire East Council’s purchase of the B&Q site in Crewe last year. Two thirds (66%) thought councils would become more reliant on income from commercial investments in the future.
Confidence in the sustainability of local government finance remained very low, with three quarters (74%) of councils saying they did not feel confident, with one in 10 councils (12%) saying they were in danger of being unable to fulfil statutory duties.
One in seven councils (14%) said they anticipated an increase in judicial challenges over cuts in service — an added cost to their pressured finances.
The Local Government Information Unit might have a bias towards local councils but the survey itself was not biased: the unit wrote to 343 councils and heard from 152, so almost half of English councils were represented. These included 80 Conservative, 55 Labour and five Liberal Democrat, so by no means anti-Tory.
There was near universal disappointment in the Government’s progress delivering a sustainable funding system for local government (97%) and a long-term social care strategy (98%).
Children and adult social care have always been protected from cuts but the survey found that adult social care was “under immense pressure” — the Government has not yet come up with a sustainable funding system — which suggested that “councils are no longer able to shield children from the worst of the budgetary pressures,” said the report.
The unit’s Jonathan Carr-West, said the state of local government finances was “dire”.
He said: “It is simply unacceptable that the Government has let things get to this point. Councils deserve better as they work tirelessly, day in and day out, to deliver the best quality services for their residents. This isn’t local government asking for more money. This is about a fundamentally flawed system that has been broken for years and the Government continually refusing to acknowledge or engage in a proper solution.”
He said the social care system was no longer on the edge, “it’s fallen off the cliff”. Children’s services weren’t at breaking point, he said “they’re broken”.
Nearly all councils (98%) were planning work to tackle climate change, with a quarter (25%) planning to attract external investment and almost a quarter (22%) intend to borrow.
The report also said councils continued to take “bold decisions” to generate new income and were making “ambitious plans to address the challenges of the future”.
The conclusions from the report are not hard to see: more services cut, more local taxation and more commercial endeavours that some will claim are not what local government is supposed to be about.