Almost 60p in every £1 that people pay in council tax will have to be spent caring for children and adults by 2020, leaving increasingly less to fund other services, like fixing potholes, cleaning streets and running leisure centres and libraries.
New analysis by the Local Government Association, published ahead of the Autumn Budget, illustrates the strain being placed on council budgets as a result of the rising demand for adult and children’s social care.
For every £1 of council tax collected by councils in 2019/20, 56p will be spent on caring for the elderly, vulnerable adults and children. This is up from 41p in 2010/11.
By contrast, 6p in every £1 will be spent on collecting bins and recycling, 5p in every £1 will be spent on improving roads and street-lighting, 2p in every £1 on bus services and just over 1p in every £1 will be spent on trading standards, licensing and food safety.
The LGA is warning that the money local government has to provide vital day-to-day local services is running out fast.
By 2020, local government in England will have lost 75 pence out of every £1 of core central government funding that it had to spend in 2015. Almost half of all councils – 168 councils – will no longer receive any of this core central government funding by 2019/20.
Government plans to allow local government to keep all of its business rates income by the end of the decade are in doubt after the Local Government Finance Bill, which was passing through parliament before the election, was not reintroduced in the Queen’s Speech.
The LGA says this has led to real and growing uncertainty about how local services are going to be funded beyond 2020.
As part of its Autumn Budget submission, the LGA said local government must first and foremost be allowed to keep all of the business rates it collects locally each year to plug growing funding gaps. A fairer system of distributing funding between councils is also needed.
However, councils are clear that keeping more business rates income on its own will not be enough to sustainably fund local services in the long-term. The LGA said the Government needs to set out how it intends to further fund councils to meet future inflation and demand for services, such as social care and homelessness, into the next decade and beyond.
LGA Liberal Democrat Group Leader, Howard Sykes, said:
“Demand for services caring for adults and children continues to rise but core funding from central government to councils continues to go down. This means councils have no choice but to squeeze budgets from other services, such as roads, street lighting and bus services to cope.
“Local government in England faces a £5.8 billion funding gap by 2020. Even if councils stopped filling potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they still would not have saved enough money to plug this gap in just two years.
“The Government must recognise that councils cannot continue without sufficient and sustainable resources. And in particular, they must listen to the Liberal Democrat calls for reform of health and social care funding.”
Notes to Editors:
View the LGA Budget submission here: https://www.local.gov.uk/sites/default/files/documents/5.20%20budget%20submission_06.pdf