Councils warn Chancellor Hammond: Local government on the brink of collapse

Services will be damaged beyond recognition if the Government fails to plug an £8bn gap, council leaders have warned

Services will be damaged beyond recognition if the Government fails to plug an £8bn gap, council leaders have warned

Tuesday, July 3, 2018

Local services are on the brink of collapse and will be damaged beyond recognition if the Government fails to plug an £8 billion funding gap, council leaders have warned.

Chancellor Philip Hammond's next spending review will be "make or break" for authorities that are already under huge funding pressures, the Local Government Association said.

Councils will have faced a reduction in core funding from the Government of nearly £16 billion in the decade up to 2020, according to the organisation.

Authorities face a funding gap of £7.8 billion by 2025, according to its analysis.

Plugging finance gap would not allow for improvement

Plugging the hole would only keep services standing still rather than allow for any improvements, the LGA said.

It issued the warning at the start of its annual conference, which is being held in Birmingham.

Chairman Lord Porter said: "We've reached a point where councils will no longer be able to support our residents as they expect, including our most vulnerable - let alone help the country to prosper.

"Councils have shouldered more than their fair share of austerity and have tried to reduce any impact on residents. But there is only so much they can do and the financial challenges they face are growing.

Local services 'damaged beyond recognition'

"Councils now spend less on early intervention, support for the voluntary sector has been reduced, rural bus services have been scaled back, libraries have been closed and other services have also taken a hit.

"More and more councils are struggling to balance their books and others are considering whether they have the funding to even deliver their statutory requirements.

"If the Government allows the funding gap facing councils and the local services to reach almost £8 billion by the middle of the next decade then our councils and local services will be damaged beyond recognition.

"The impact on society - all places, all generations, every person - will be hugely damaging.

"Millions of people will be deprived of the vital local services that help improve quality of life and bind communities together."

Government providing £90bn

A spokesman for the Ministry of Housing, Communities and Local Government said: "We recognise the pressures councils are facing, so we are working with local government to develop a funding system for the future.

"Over the next two years, we are providing councils with £90.7 billion to help them meet the needs of their residents.

"On top of this, we are giving them the power to retain more of the income they get from business rates so they can use it to drive further growth in their area."

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