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Councils in England face funding gap of £6.2bn, says report

Bags of rubbish and overflowing bins (Anna Gowthorpe/PA)
Bags of rubbish and overflowing bins (Anna Gowthorpe/PA)

Councils in England face a funding gap of £6.2 billion over the next few years, according to a report.

A study by the Local Government Association (LGA) showed that the problem is being driven by rising costs and demands to provide adult social care, children’s services, homelessness support and transport for children with special needs and disabilities.

The LGA said a new relationship between central and local government, providing long-term financial certainty, is the only way for the next government to solve such issues.

Councils are increasingly left with less funding to provide universal local services that people rely on every day such as keeping streets clean, filling potholes and tackling anti-social behaviour, said the association.

A recent LGA survey found two-thirds of councils had already had to make cutbacks to neighbourhood services this year including waste collections, road repairs and library and leisure services as they struggle to plug funding gaps.

The LGA is calling on all political parties to commit to a “significant and sustained” increase in funding for councils in the next Spending Review, alongside multi-year funding settlements for councils and plans to reform the local government finance system.

Without this, the LGA said, cost and demand pressures will continue to stretch council budgets “to the limit” in the coming years, leaving more councils unable to deliver their legal duties for their residents and putting vital services at further risk of cutbacks.

Kevin Bentley, senior vice chairman of the LGA, said: “We all rely on local government to keep our streets clean, collect our bins, fix our potholes, build more homes, create jobs, keep children safe and support people of all ages to live fulfilling lives.

“However, a funding gap facing local services of more than £6 billion over the next two years – fuelled by rising cost and demand pressures – means a chasm will continue to grow between what people and their communities need and want from their councils and what councils can deliver.

“On July 5, the next government will be faced with many challenges, whether it is building more affordable housing, improving care for adults and children, reducing homelessness, boosting inclusive growth or tackling climate change.

“Local government’s offer to the next government is huge. Respect us, trust us and fund us. By working together as equal partners, we can meet the fundamental long-term challenges facing our communities.”

Unite national officer Clare Keogh said: “Local government has been decimated over the last 14 years, with thousands of frontline jobs already cut, while demand for services keeps rising.

“Services are already stretched far too thin. The situation is at breaking point and further job losses cannot be the answer.

“The incoming government must commit to properly and fairly funding the sector to meet need, and to reverse the years of decline we have seen.”

Unison’s head of local government Mike Short said: “Councils are facing an existential crisis because of years of severe government underfunding.

“Wave after wave of budget cuts to essential services has harmed communities immensely, with the worst off always the hardest hit.

“Authorities have been forced to sell off buildings, open spaces and other prized assets, and cut thousands of jobs.

“But still their books won’t balance – and now scores of town halls face effective bankruptcy.

“Without a sustained programme of proper investment many more will go under. This cannot be allowed to happen. Local services, and the councils that provide them, are too important to lose.”

Sharon Wilde, GMB national officer, said: “This report is welcome – it highlights what GMB has been saying for more than a decade. Our vital public services are being starved of the funding they need to operate.

“GMB members in local government help our children learn, keep our roads safe and streets clean, they make sure our libraires open and our parks tended.

“Yet for years they have suffered real terms pay cuts and been forced to prop up our creaking councils with huge amounts of unpaid overtime.

“Hopefully the nightmarish austerity experiment will soon be over after 14 long years -but whoever is in charge next year, GMB will demand all local government pay offers are fully funded by central government.”

Jackie O’Sullivan, acting chief executive at learning disability charity Mencap, said: “This worrying report further highlights the desperate financial situation local authorities are facing.

“It must serve as a wake-up call to the next government, who will need to get to grips with the perilous state of social care across our country.

“We are hearing devastating stories from people impacted by this chronic underfunding with many families being left to plug the gap of vital support their loved ones need.

“We also know many people are having their funding drastically cut despite their needs staying the same.”