‘Sticking plaster’ funding doesn’t change need for council tax reform, accountants claim
An extra half a billion pounds in emergency social care funding for councils is a “sticking plaster” which won’t address “tough choices”, accountants have warned.
Levelling up secretary Michael Gove confirmed today local authorities will receive £500m in emergency cash to be spent on social care services.
But the Institute of Chartered Accountants in England and Wales warned that additional cash only amounted to around 70p per month for each resident.
Director Alison Ring said: “This is a sticking plaster designed to defer confronting the major problems with the local government funding system until after the general election.
In the meantime, councillors will still be faced with tough choices around which local public services to cut in order to balance their books for the coming financial year.”
It comes after council leaders and MPs called on the government to reform council finance and end “short-term” measures, following a slew of bankruptcy notices in recent years.
Town hall bosses held an emergency meeting in Westminster on Tuesday to put pressure on ministers, while dozens of Tory MPs warned they would vote against government legislation.
Gove said the fresh funding package upped the local government finance settlement from £64bn to £64.7bn and the rise was thanks to “the government’s plan to halve inflation”.
The minimum percentage annual increase in money available to all councils before local decisions on council tax has also gone up, from three per cent to four per cent, while rural services funding has risen by £15m and an extra £3m allocated for drainage board levies.
Morning Wire reported last year that London’s councils are half a billion pounds in the red, while seven UK councils have issued at least one section 114 notice since 2020, with three in the last year.
The notices are an acknowledgment that the local authority cannot balance its books as required by law and lead to a freeze on non-essential spending on services.
Labour’s Angela Rayner said: “This emergency hand-out is an admission of total failure… yet another sticking plaster over the gaping financial wound inflicted on our communities.”
While the Lid Dem housing spokeswoman Helen Morgan added: “Councils everywhere have been crying out for years about their finances but the government repeatedly ignored them.
“It is local communities who are bearing the brunt of this neglect. Much-loved community services have fallen by the wayside because of underfunding of local authorities.”
County Councils Network chairman Tim Oliver said the money would “go some way to easing pressures” but authorities “still face difficult decisions” on cutting services while raising council tax for residents by the maximum amount allowed.