Cash-strapped councils’ pleas for funding have finally been listened to by central government. Chancellor Philip Hammond’s response will be to cut the main funding grant to councils by £1.3bn during 2019/2020.
More cuts
The £1.3bn cuts will see central government funding reduced by 36%. The Local Government Organisation has said that 168 councils won’t get any revenue support grant money at all.
By 2020, local authorities will have seen nearly £16bn in funding reductions since 2010. This equates to a 60% loss of central government grants in that time.
Council funding crisis
As The Canary has previously reported, UK councils are already in a deep financial crisis. Research from the County Councils Network shows 37 of the largest councils in England are being hit with a combined £3.2bn cut to funding over the next two years. The results of these cuts will be local services suffering severely or, in the worst cases, being scrapped completely.
The Local Government Association (LGA) argues that funding pressures and increased need for adult and child social care services are “pushing councils to the limit”. These pressures will see local services hit with a £3.9bn funding “black hole” next year.
Chair of the LGA’s Resources Board Cllr Richard Watts states:
Losing a further £1.3 billion of central government funding at this time is going to tip many councils over the edge. Many local authorities will reach the point where they only have the funds to provide statutory responsibilities and it will be our local communities and economies who will suffer the consequences
Action needed
The government’s reduction in funding has seen closures of important facilities such as libraries and Sure Start centres. Cuts mean councils can’t provide care for elderly or disabled people or children, or fill potholes and build homes. Council funding is essential for the economic growth and development of all regions of the country.
Watts sums it up:
Investing in local government is good for the nation’s prosperity, economic growth and for the health and well-being of our nation. It will boost economic growth, reduce demand for services and save money for the taxpayer and others part of the public sector
The LGA is urging Hammond to use the budget and upcoming 2019 spending review to provide a solution to the council funding crisis. However, with the government’s track record on public spending, this provides little hope for the many people suffering.
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