'Bleak future' if funding crisis isn't resolved, warns St Helens Council leader

This week the Local Government Association (LGA) revealed that one in three councils fear they will run out of funding to meet their legal duties by 2022-23.

Lord Porter, LGA chairman, said councils remain “completely in the dark” around what financing will be available next year.

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This has been echoed by St Helens Council leader David Baines, who has urged the government to end the uncertainty around future financing.

“Local government finances are facing unprecedented uncertainty,” Cllr Baines said.

“Nine years of Lib Dem and Tory austerity means that much of what councils provide which hasn’t been lost completely since 2010 has either been cut back or become chargeable, and vital statutory services such as adult social care and children’s services face a bleak future unless things change.”

Between 2010 and 2020, councils will have lost 60p out of every £1 they had from central government to run local services.

Cllr Baines reiterated previous claims – backed up in November by the UN special rapporteur on poverty and human rights, Philip Alston – that austerity is a “political choice”.

The Labour leader also criticised Boris Johnson and Jeremy Hunt for failing to raise the current issues around local government financing during the ongoing Tory leadership contest.

Cllr Baines said: “The Tory leadership election has been a depressing and infuriating spectacle for too many reasons to mention, but not least because neither candidate has raised the issue of local government funding or given any indication they recognise the huge problems we face in the years ahead.

Tory leadership contenders Boris Johnson and Jeremy Hunt have been criticised for not addressing issues around council funding​

“Austerity has always been a political choice.

“It was a deliberate decision by the Lib Dems and Tories to put essential services in St Helens in this position, and the Tory government now could just as easily decide to put an end to the uncertainty and invest in our communities and people.

“I urge them to do so.”

The LGA estimates that councils in England face an overall funding gap of £3.1 billion in 2020-21, rising to £8 billion by 2025.

It said an unprecedented rise in demand means many councils are having to spend more than they planned for in adult social care, children’s services and homelessness support.

These overspends, it said, have forced councils to make in-year budget cuts to try and balance their books.

LGA chairman Lord Porter said there is a “real risk” to the future financial viability of some services and councils if the government fails to adequately fund local government.

Lord Porter said: “Councils would normally have started their budget-setting planning process but remain completely in the dark about how much funding they will have next year.

“Communities relying on the vital local services that make a difference to their lives deserve better.

“Securing the financial sustainability of local government must be the top priority for the next Prime Minister.

“Urgent guarantees are needed that councils will have the funding they need to ensure our vital public services survive the uncertainty ahead.

“With the right funding and powers, councils can continue to lead their local areas, improve residents’ lives, reduce demand for services and save money for the taxpayer.”

The results of the LGA survey shows that almost a fifth of councils are not confident of realising all of the savings they have identified to make in 2019-20.

St Helens Council leader David Baines

Additionally, almost two thirds of councils fear they will run out of funding to provide statutory services by 2024-2025 or later.

The initial findings of the survey of council finances have been released ahead of the government’s spending review, which the LGA said will “make or break” vital services.

Despite this, the LGA said the uncertainty around Brexit means the chances of the government carrying out a three-year spending review this year look “increasingly unlikely”, with councils instead looking at a one-year roll-over settlement.

In light of the results of the survey, the LGA has called for the next Prime Minister to prioritise local public services in the spending review and give councils “urgent certainty” about future funding.

The Department for Housing, Communities and Local Government (MHCLG), said it provided local authorities with access to £45.1 billion in 2018-19, increasing to £46.4 billion in 2019-20.

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On top of this, the Autumn Budget confirmed an additional £650 million for social care in 2019-20.

A MHCLG spokesman said: “Councils are a vital link to meet the needs of residents, that’s why we’re providing local authorities with access to £46.4 billion this year – a real terms increase – including extra funding to support some of our most vulnerable groups.

“Ultimately councils are responsible for managing their own resources and we are working with local government to develop a funding system for the future.”