In what’s becoming a bleak pattern, the government chose Tuesday – Theresa May’s second attempt to pass her Brexit deal – to finalise its next round of cuts to councils.
Ministers outlined the provisional local government finance settlement for 2019-20 last December. But they chose this week to announce its final plans for short-term local government funding – in a written statement, the subtlest form of government announcement, by the Communities and Local Government Secretary James Brokenshire.
After eight years of austerity, cash-strapped councils have been waiting for the government to use its final settlement this month to provide the resources they desperately need for funding public services in 2019-20. But the new settlement – sneaked out while Westminster is distracted by Brexit – doesn’t deliver what councils need.
As first announced in the Budget, the government is releasing extra chunks of funding for social care and potholes, as well as more money for high streets. The government calculates that its settlement adds up to a rise in core spending power for councils from £45.1bn in 2018-19 to £46.4bn in 2019-20: a 2.8 per cent cash increase. (It has also reiterated the £56.5m across 2018-19 and 2019-20 to help councils prepare for Brexit, which we can’t really count as extra funding as it’s to fill a Brexit-shaped hole.)
Firstly, this money isn’t enough – councils still face a funding gap of more than £3bn this year, according to the Local Government Association. The pressure to set legal budgets, with an average 49 per cent drop in real terms spending power since 2010 and rising social care demands, means councils need substantially more than a 2.8 per cent raise. Labour’s shadow local government secretary Andrew Gwynne has called the plan a “shoddy deal”, and warns it “means more cuts to our councils”.
Secondly, the funding announced is simply a short-term one-off. There’s no new system for funding social care – with the long promised green paper on adult social care repeatedly pushed back. Decisions on other structural concerns – business rates retention and a fair funding formula for local government – have been put off, with consultations being published instead.
Councils are desperate for a long-term, sustainable funding settlement. As the head of the National Audit Office, Amyas Morse, said last March: “Current funding for local authorities is characterised by one-off and short-term fixes, many of which come with centrally driven conditions.”
“It does not solve medium term financial pressures so tough decisions will still need to be taken and our members will have little choice but to raise council tax to meet demand-led pressures in services,” warned Paul Carter, chair of the County Councils Network.
Plans for 2020 and beyond are yet to be determined, according to the Institute for Fiscal Studies, which concludes that “current plans imply further cuts for unprotected services after 2019-20”.
This means councils will continue to operate in a financial void, unable to fund public services properly, while waiting for something to change in the promised Spending Review later this year.
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