This Is Why We Should All Be Concerned About The State Of Local Government Finance

Like the Prime Minister’s Brexit chaos, horror stories about the dire state of local government finances have come to feel a bit like groundhog day. So you’d be forgiven for missing the findings of the the State of Local Government Finance Survey released on Thursday.

But the results deserve attention.

The Local Government Information Unit and The Municipal Journal survey English councils every year on the state of their finances. Crucially, the surveys are filled in at the beginning of the year - just as councils are setting their budgets – and so provide a telling snapshot of the true state of local government finances in England.

The results make for chilling reading.

Not a single respondent is “very confident” that local government finance is sustainable. Most – eight in 10 – say they are not confident that it is.

More than half of respondents plan to cover their annual outgoings by dipping into their reserves this year, and most of these (40% of respondents) will be doing this for the second year running.

And the survey results are clear that the results of financial pressures will be: more cuts to community services such as libraries, parks and leisure and arts and culture; increases in council tax; and more fees and charges attached to council services that were once provided publicly and available to all.

The basic universal services, such as waste collection and street cleaning, long provided by councils are suffering. But even more worrying is the impact on councils’ ability to fulfil their responsibilities in providing adult and children’s social care.

Adult social care has been overtaken by children’s services as the top immediate financial pressure, though adult social care remains the most severe pressure in the long-term. All this raises the terrifying prospect of a catastrophic failure to look after our most vulnerable looming on the horizon. 

It’s important to note the survey results include responses from a broad cross-section of councils – covering county, district and unitary authorities, a mixture of political control, and all regions. So hard has local government been hit by austerity, that not even councils in wealthier areas have been spared.

You might think that the financial collapse of Tory-run Northamptonshire county council a year ago – as well as the ongoing financial difficulties faced by county councils in other Tory heartlands, such as Somerset and East Sussex – would be enough to force a government rethink. That the closures of Sure Start centres and libraries in affluent areas would send a clear message to this Government that the cuts have gone too far.

But instead of waking up to the crisis they have created, the Tories’ new cynical ploy is to silence complaints from councillors in their own Party by redirecting scarce funding from deprived – and usually Labour-run – urban areas to the affluent Tory shires.

Under the Government’s proposals, put forward as part of their deceitfully named “fair funding review”, revenue grants for councils will no longer reflect levels of deprivation in an area and the higher costs that come with it. Instead. Funding will be allocated on a population-basis - with a top up for rural (and often – though admittedly not always - wealthy) areas.

As a result of this, potentially tens of millions of pounds could be diverted to rural and suburban council areas away from areas that need it most.

This is a shameless attempt to deal with disquiet on their own side by propping up financially struggling Tory authorities and improve services in key Tory marginals, with complete disregard for the impact on poorer communities.

But these communities are already stretched to breaking point.

The Tories need to think again, and put the needs of communities across the country above their own political expediency. Labour are fighting – both in Parliament and in our communities – to make sure that they do.