While the Government and Parliament are deadlocked by Brexit, the crisis in local government deepens by the day. Answers about the future shape of the funding system have yet to materialise, nearly 4 years after Osborne first announced the move to full Business Rate Retention. Meanwhile, councils count down to the April 2020 cut-off, after which they don’t know where their funding will come from.
LGiU’s Local Finance Taskforce is continuing its campaign to #FixCouncilFunding. We have travelled around the country and heard first-hand how the uncertainty is damaging council services. We have consulted on alternative options for a sustainable financial future. And we have continued to beat the drum in the media to keep the public informed and engaged.
We’re delighted that some of our campaign calls have been achieved already, including our call for a formal consultation on the options for council finances which the HCLG Select Committee announced in March. (See below for a full Taskforce progress update.)
We encourage you to get involved, whether that’s retweeting us, hosting an event or giving feedback on the direction of our work. Find out what we’ve been up to and how you can help below.
Options for reforming council funding – consultation and final report
Following the publication of the Local Finance Scorecard last June, outlining the pros and cons of 19 alternative ideas for council funding, we have undertaken extensive consultation with the sector to hear their views on the options. We have held roundtable events in Norwich, London and Nottingham, as well as discussions on finance at our annual Leader’s Dinners at the party conferences. We also ran an online consultation inviting views on the scorecard options. Many thanks to everyone who has taken the time to speak with us.
We will be bringing this together in a final report to be launched in early July. We will then use the recommendations to lobby Government in advance of the proposed Spending Review.
State of Local Government Finance Survey 2019
In February we launched our annual State of Local Government Finance Survey, which received widespread national media attention and fuelled the debate on the sustainability of council finances. This year we tried to capture the human impact of the ongoing cuts and uncertainty. Headline findings included:
- Eight in ten councils say they are not confident in the sustainability of local government finance
- Over half of councils plan to dip into their reserves this year
- Almost one in ten councils are anticipating legal challenges this year due to reductions in service provision
- Children’s Services and Education is the top immediate financial pressure for the second year running (36% of councils), ahead of Adult Social Care
- Councils will be forced to cut many community services this year, with reduced activity expected across libraries (32% of councils), arts and culture (46%), parks and leisure (45%), waste collection (22%), recycling (11%) and roads (38%)
We also recorded a special edition of our LGiU Fortnightly podcast, featuring interviews with many leading voices in local government including council leaders, the LGA, SOLACE and experts from the NAO, IFS and CfPS. Listen to the episode here: LGiU Fortnightly 15th February: Fixing council funding.
LGiU evidence to the HCLG Committee Inquiry: Local Government Finance and the 2019 Spending Review inquiry
One of our campaign asks was for a formal consultation into the options for the future of local government funding, taking a wider view than the Fair Funding Review or Business Rates Retention. We were therefore delighted that the Housing, Communities and Local Government Committee launched just such an inquiry in March. LGiU will be giving evidence to the committee based on our findings from consulting with the sector.
Approaching the cliff-edge – countdown to April 2020
To emphasise the urgency of the financial situation in local government, we launched a ‘Countdown to 1st April 2020‘ clock on our website. This is the date on which the Revenue Support Grant runs out for all local authorities, after which councils face a financial cliff edge. Read our blog Countdown – one year til the financial cliff edge for our thoughts on how to move forward.
TASKFORCE PROGRESS UPDATE
1. Ensure the issue stays at the top of the media agenda by working with stakeholders and bringing the issue to different audiences
STATUS: Ongoing. We’ve been keeping council finances in the headlines – see BBC 5Live, The Times, The Mirror, HuffPost, FT, The Sun, ITV News, Telegraph, Daily Mail – and we’ll continue to do so!
2. Lay out a road map for the future sustainability of local finance and spark debate about the best options
STATUS: Near complete. We have published the Local Finance Scorecard and consulted with the sector on the options. The final report is due in early summer.
3. Bring local government voices strongly into the debate by facilitating constructive conversations with Government that results in consensus moving forward
STATUS: Ongoing. We have spoken with leaders and chief officers up and down the country and met with key Government and Shadow Cabinet stakeholders.
1. A formal consultation on all the options for the future of local government funding
STATUS: Achieved! In March the HCLG Select Committee announced their inquiry into local government finance. LGiU will be submitting evidence to the Committee.
2. A commitment to maintain a consistent level of funding for 3 years
STATUS: No commitment given yet.
3. A commitment to cover costs to local government associated with future changes to business rate policies
STATUS: Partially achieved. The Government has stated its intention to centralise the risk from business rates appeals and committed to compensating local authorities for the new rate relief introduced in the Autumn Budget 2018. However, aside from the ad-hoc agreements under Section 31 grants, a more permanent commitment to reimbursing councils for business rates policy changes still hasn’t been made.
4. Clear vision for the future of adult social care and devolution, in order to facilitate forward planning and investment
STATUS: Unfortunately the social care green paper has been delayed again, and further devolution seems to have dropped off the agenda.