Eric Pickle’s announcement brings further cuts in funding for local services taking the reductions to over 30% over the four years. This comes on top of the unprecedented cuts councils already have to implement. This is very bad news for local services and significantly undermines the role councils can play in promoting economic recovery.
It is good that the Government has taken significant steps to soften the possible negative financial impacts of changes to business rates distribution and funding for education services. Despite these sensible moves councils are still exposed to some sizable new costs and risks which are likely to draw money away from other services.
Local government has borne the brunt of cuts to public spending, and the announcement confirms that this will continue to be the case until 2015. What was scheduled to be an extremely challenging 28% reduction in council funding will now exceed 33% and, for some councils, may go much higher. In comparison, Whitehall department budgets are being cut by on average 8% and a further 1% this year. Councils are one of the few parts of the public sector which actively promote economic growth. Curtailing that role hampers Britain’s economic recovery.
Colleagues at the Local Government Association and I have worked hard starkly to illustrate to Mr Pickles and the Treasury, what the effect of further cuts will be on our ability to provide the fundamental services people expect, and how we can contribute to building the economy of the country.
Mr Pickles has responded positively to our representations on two issues; the new funding system based on partial local retention of business rate growth was going to hold back too much cash in central government coffers “We’ve listened to local government […] reduced the amounts that we are setting aside for New Homes Bonus, for the safety net and for academies funding. In total that means an additional £1.9bn for local authorities upfront in 2013-14.”
Whilst there are differences of opinion of the actual amounts, the recognition of the problem caused to budgeting from witholding funds has been recognised.
However, it is disappointing that the government has chosen to cut Local Government funding even further than previously announced. Local Government took a 28% cut over four years, which is more than any other department, on the understanding that at least we knew where we stood. This is a new additional cut on top of the previously known reductions.
At the same time, there are increasing demands being made on Councils, particularly in adult care. That leaves much less for any other services. I and others have made sure the ministers fully understand our situation. We need to make cost-effective reductions, but there comes a point where cuts can have more damaging and expensive knock-on effects.
As budgets tighten still further, it remains vital that councils properly communicate and genuinely engage the public in the decision-making. We need to hear many voices from different perspectives if we are to represent the public and make the right decisions. Far too many decisions in Lincolnshire are made behind closed doors, serving the interests of only a portion of our communities.