One in three councils fear running out of funding for legal duties: LGA

One-third of councils fear they will run out of funding to provide their statutory services by 2022-23, the Local Government Association has warned.

In a survey released ahead of its annual conference in Bournemouth this week, the LGA said the survey also found almost two-thirds of councils expected they would be unable to afford to provide statutory services by 2024-25 including adult social care, protecting children and preventing homelessness.

The LGA has estimated that councils face an overall funding gap of £8bn by 2025.

Unprecedented increases in demand for adult social care, children’s services and homelessness support meant that 17% of councils were not confident of realising all of the savings they had identified for 2019-20, the survey found.

This had forced councils to make in-year budget cuts to try to balance their books.

According to the LGA, between 2010-20 councils will have lost 60p out of every £1 they had from central government to run local services.

A three-year Government spending review is due later this year but the LGA fears that uncertainty over Brexit will make this impossible to hold, and councils could therefore face a one-year roll-over settlement, making long-term planning harder. 

It called for priority for local services in any spending review, continuation of key funding streams next year, such as the Better Care Fund and a Government guarantee that councils will have the money to meet pressures in adult social care, children’s services, special educational needs, homelessness support and public health.

Outgoing LGA chair Lord Porter, the Conservative leader of South Holland District Council, said: “If the Government fails to adequately fund local government there is a real risk to the future financial viability of some services and councils.”

He said councils would normally have started to plan their budget setting by now but had struggled as they “remain completely in the dark about how much funding they will have next year”. 

“Securing the financial sustainability of local government must be the top priority for the next prime minister,” Lord Porter said. 

Leicestershire leader Nick Rushton, County Councils Network finance spokesman, said the LGA’s findings were “another stark example of the challenges facing local government over the coming years, and the impact of the uncertainty surrounding the spending review”.

Cllr Rushton said: “Councils need immediate financial certainty from the incoming prime minister. If a full three-year spending review is unable to be delivered owing to Brexit uncertainty, county leaders have been calling for an emergency injection of funding for local authorities next year, alongside a commitment to publish the outcome of the fair funding review.”

Mark Smulian