Budget 2016: cutting local government funding is a false economy

Budget 2016

Ahead of this weeks budget announcement the Local Government Association (LGA) has warned that cutting local government funding further is a false economy.

The LGA has made a number of recommendations in its submission to the budget, due to be announced on Wednesday. Highlighting the 40 percent cut in real term funding that councils faced in the last government, the submission advises that momentum for devolution must continue and praises the move towards 100 percent business rate retention.

Although the the Government has stated that total funding for core council services in 2019/20 will remain close to the amount it is today, the LGA’s submission emphasises the increasing cost pressures that local government will face between now and then. These include the introduction of the National Living Wage, the general cost increases of an ageing and growing population and a £12 billion backlog in pothole repairs.

Lord Porter, Chairman of the LGA, said “Councils have more than played their part in trying to balance the nation’s books in recent years and all councils will have to continue to find substantial savings from local services to plug funding gaps over the next four years. Extra council tax powers and transitional funding will help some but won’t be enough to completely offset the full impact of funding pressures.

“Cutting local government to prop up other departments is a false economy. The Government should carefully consider the effect council funding cuts have on other parts of the public sector and whether to tear down the ring-fence around health and education spending.

“Pumping money into the NHS while councils receive less social care and public health funding is a false economy. A properly funded social care system is essential to alleviate the pressure on the NHS while schools and councils also need to be able to pool resources to ensure children are school ready, reduce drop-out rates and improve children’s physical and mental health.

Most commentators agree that George Osborne will use Wednesday’s budget to appease voters and backbench Conservative MPs, who are already split over the  EU referendum. However, with slowing economic growth and a smaller economy than predicted, the Chancellor has already indicated that spending cuts will be announced.

To read the Local Government Association’s submission to the budget click here.

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