Spending Round 2019: reaction from the sector

Local Government Lawyer looks at the reaction to the Spending Round announced by the Chancellor of the Exchequer this week.

Cllr James Jamieson, Chairman of the Local Government Association

“We are delighted that today’s Spending Round has delivered a funding package of more than £3.5 billion for our vital local services next year. This is the biggest year on year real terms increase in spending power for local government in a decade and will allow councils to meet the rising cost and demand pressures they face in 2020/21.

“The LGA has worked hard to demonstrate to the Government the financial pressures facing councils next year. We are pleased it has responded to our calls and acted by providing desperately-needed new money next year, including £1 billion for social care and £700 million for children and young people with special educational needs.

“This will help councils as they strive to ensure older and disabled people can live the lives they want to lead, support our most vulnerable young people and allow them to continue to improve local areas.

“Confirmation that key grants will also continue next year provides much-needed stability for councils. The ability to levy an adult social care precept again next year helpfully gives them the potential to raise a further £500 million to help people in our communities who need care and support.

“Today’s Spending Round has provided councils with much of the certainty they need about how local services will be funded next year.

“It shows that the LGA is successfully making the case that investing in local government is good for the nation’s prosperity, economic growth and the overall health and wellbeing of the nation. With the freedom and funding to make local decisions, there is clear evidence that outcomes for the nation improve and the country gets better value for money.

“We are ready to work with the Government on how a forthcoming Queen’s Speech can spark the radical legislative programme that will reignite the devolution process so councils can continue to lead their local areas and improve the lives of their residents.”

Dr Jonathan Carr-West, Chief Executive of LGiU

“The Chancellor billed today’s spending round as an end to austerity. And while it’s true that local government has seen its biggest spending increase in a decade, the Chancellor should not expect too many plaudits from councils across the country. This additional money does not undo a decade of cuts that bled councils dry.

"In terms of clarity about how local government is to be funded sustainably in the future, we are no clearer today than we were yesterday. We still don’t know the outcome of the Fair Funding Review. We still don’t know how business rate retention will work.

"This Spending Round provides funds for services. And while that is better than not funding services it is not as good as funding local government.

"We know that to make services effective in the future, they need to be multiagency, integrated, preventative and shaped around local needs and assets. You can only achieve that by funding local government and letting democratically elected local leaders decide on local priorities not by throwing isolated pots of money at individual service areas.”

Cllr John Fuller OBE, Chairman of the District Councils Network

“This is the most generous settlement for councils in a decade who have been working hard in every street up and down the country to do more with less.

“Too often councils have been down the pecking order and today’s Spending Round is a welcome recognition that district services, such as housing, bins, high streets and more, are rightly valued equally as highly as the police, teachers and health service.

“The funding for adult social care, while not going to districts, is welcome and should also allow councils to work more creatively to reduce demand and prevent problems before they happen.

 “We are also pleased to see the continuation of the New Homes Bonus which will allow us the certainty to invest in infrastructure alongside the building of new homes.

 “Despite today’s announcement, councils still face significant financial challenges in continuing to provide the local leadership our residents deserve. We look forward to continuing to work with government ahead of the next Spending Review, to make sure district councils get the long-term funding certainty they need to build stronger economies and enable people to lead better lives.”

Don Peebles, Head of CIPFA UK Policy & Technical

"This announcement is certainly a welcome first step but appears to represent a substantial increase in government borrowing and does little to put funding for public services on a sustainable footing for the long-term.

"The £15bn of fiscal headroom that was earmarked in the spring as a three-year Brexit contingency fund is effectively being spent in a one-year spending round, ahead of a likely general election.

"This review has been announced without the OBR’s fiscal forecasts and commentary making it difficult to evaluate these spending commitments within a proper fiscal context and with outdated economic forecasts.

"As the possibility of a no-deal Brexit persists, the UK is approaching a potential economic cliff edge and the public sector will be taking on higher debt without knowing the real costs of the UK’s departure from the EU.”

Julie Ogley, President of the Association of Directors of Adult Social Services (ADASS)

“At first glance this appears to offer clarity for next year so that decisions can be made about which services can continue and how the workforce sustained. We recognise this as a positive first step that ADASS and those of us who are older or disabled, those who are carers and those who deliver care will welcome.

“It is not as much as we and others have set out is needed and we will want to understand the detail including how this fits with other funding for local government and the NHS. We look forward to working with the government, with those across parliament, partners across the sector, and with those people who need care and support to take forward longer term funding reform and to develop a social care long term plan.”

Paul Dossett, head of local government, Grant Thornton UK LLP

“Today’s Spending Round presented a generally positive picture for local government funding, with the announcement of the largest increase in spending power since 2010. This is a much needed increase for councils who are currently struggling to provide the vital public services our communities rely on every day.

“Demand led services have placed increasing pressure on councils’ funding, making up to 80% of total spend in many councils in 2017/18. We therefore welcome the announcement that local government will have access to an additional £1 billion of funding in 2020/21 for adults and children’s social care and, following consultation, will be able to levy the 2% adult social care precept again next year, contributing another £500 million from the taxpayer. The government has demonstrated a commitment to supporting the most vulnerable in our society and an increase of £700 million for children and young people with special educational needs, and an additional £54 million to help tackle homelessness and rough sleeping in local communities, will allow councils to continue to provide much needed care for those in need.

“The re-confirmation of the £3.6 billion Towns Fund, and a suggestion of increased focus on infrastructure in the future, is promising. However, given the ongoing housing crisis in our country and the focus on this in recent Budgets, it is surprising to see no further announcements in this Spending Round.

“Whilst the challenges facing local authorities won’t be resolved overnight, today’s announcement will help in alleviating some of the financial pressures in the short term. Councils now have a degree of certainty for the year to come, but will need to continue to maintain prudent controls over their finances to ensure their longer-term sustainability.

“Overall, the Spending Round has provided local government with the power to plan through to March 2021. As always the devil will be in the detail for each council: the detailed settlements for each individual council will be pivotal at a local level. Beyond next year, the full three-year Spending Review planned for next year will be vital to provide long-term, sustainable solutions and help resolve the critical funding issues facing the sector.”

Rachel Dickinson, President of the Association of Directors of Children’s Services (ADCS)

“Today’s funding announcements offer some short-term respite for children’s services but few reassurances about the future. This is at least some recognition of the concerns ADCS, and others, have been consistently raising about the growing pressures faced by children and families as well as the public services that support them in times of difficulty.

“Local government funding has fallen by half over the last nine years but need has not. A failure to invest in children’s futures is only storing up fiscal and human costs for the future. What’s missing from today’s announcements, and what must be a feature in the next full spending review, is meaningful and sustainable investment in helping families early, when issues first arise thus averting the need for the state to become deeply involved in family life. Youth workers, children’s centres and family support workers are not simply nice to have, they are part of a valuable safety net that prevents children being harmed.

“We cautiously welcome the investment in education at primary, secondary and at FE level as well as the additional funding to support learners with special educational needs and disabilities and await further detail about timings and allocations. Today’s funding pledges come at a deeply uncertain time and we dearly hope these commitments will still stand regardless of the outcome of the latest ‘Brexit’ crisis. Children’s voices are not easily heard in Westminster but we will continue to champion their rights and to call for the government to invest fully in their futures, not just offer them the bare minimum levels of resourcing and support.”

Jonathan Werran, chief executive of the Localis think tank

“The well-rehearsed social care funding announcement, offering councils access to £1.5bn, and it’s framing as a down-payment for future reforms will come as some measure of relief to local government, but comes in the absence of any further solid determinations on long-term funding reform.

“A genuine solid financial foundation for local government would entail more than attempts to clawback some of the trajectory of spending reviews since 2010, and point to a longer-term move towards fiscal devolution in recognition that council tax and business rates revenues will not suffice to meet further care and local service demands. 

“Although this is more of a marathon than the record-breaking sprint which Rishi Sunak and HM Treasury have accomplished in this fastest of spending round processes, it would promise to establish a stronger and more stable local state upon which an infrastructure revolution might be built and help with levelling up prosperity and productivity across all parts of the country.”