‘Too little, too late’: Council funding to rise by £4bn
Funding for English councils will rise by 6.5 per cent – or £4bn – but authorities say the cash fails to address the “severe problems” facing local government.
Levelling up, housing and communities secretary Michael Gove has confirmed reports the government will grant a £64bn funding package for frontline services to councils in England.
The provisional financial settlement will fund local authorities through 2024-25 and ministers say it is an above inflation increase which recognises the pressures councils are under.
But experts warn the cash will not go far enough to address what amounts to a crisis in funding, including for London’s 32 boroughs.
It follows exclusive analysis by City A.M. revealing London’s councils were half a billion in the red and trapped in a “perfect storm”, with tax rises on the cards to meet yawning deficits.
The Local Government Association (LGA) has also warned that English councils face a £4bn funding shortfall over the next two years, with one in five council bosses rating it very or fairly likely they could go bust over that period.
Detractors argue that the package includes no additional funding beyond what was in last year’s Autumn Statement, alongside allowing for council tax increases up to almost five per cent.
Jonathan Carr-West, chief executive of the Local Government Information Unit (LGIU), said the money “does not address the severe problems” and is “simply too little, too late”.
And Barry Lewis, finance spokesperson for the County Councils Network (CCN), called it “bitterly disappointing” and warned councils would “have no choice but to implement more severe reductions to services and to levy higher council tax rises”.
He added: “This will undoubtedly be a double whammy for residents during a cost of living crisis, while an increasing number of authorities will struggle to deliver a balanced budget.”
Local government minister, Simon Hoare said: “It is good news for our local government sector that we are presenting an above-inflation increase in funding.
“We will continue to work alongside councils to ensure quality and reliable services are provided to those who need and use them, while also keeping a weather eye on ensuring value for the taxpayer.”