Urgent help needed as district councils forced to make 9% cost reduction savings, DCN says
The District Councils' Network (DCN) has called on the Government to provide additional grant and freedom to raise money locally in order to stave off "disastrous" cuts to council services.
The DCN's finance spokesperson, Cllr Elizabeth Dennis, said it anticipates councils will make savings amounting to 9% of their budgets through efficiencies, "but increasingly savings are only achievable through workforce cuts and service reductions".
She said that any further scaling back of district council services "would be disastrous".
Cllr Dennis said it is essential that district councils' spending power rises by at least 6% next year to avoid the worst cuts.
This could be achieved through additional grant and the freedom to raise money locally, in particular by being able to increase council tax by 4.99% or by £10 – whichever is greater – without a referendum.
In addition, she called on the Government to fulfil its pledge to allow councils to increase planning fees to lessen the shortfall between them and the overall cost of providing planning services.
She also urged extra support for the services hit by the highest rising demand, such as providing temporary accommodation where current funding lags behind actual costs.
The calls come in response to the findings of a survey of 79 councils conducted by the DCN, which showed that councils are looking to secure an average of 9.1% cost-reduction savings to ensure their services remain financially viable.
Many councils surveyed cited pay as putting significant pressure on all services, with 79% of councils expecting the increase in the National Living Wage to increase their pay bill by over 4% in 2024-25.
The survey also showed that for councils that renegotiated contracts in the last year, costs increased by 30% on average, with some energy contracts soaring by over 200%.
Sixty-four per cent of respondents said inflationary pressures forced them to pause or significantly amend the timing or scope of a capital project, such as a town centre regeneration or leisure centre rebuild, since April 2022.
Compounding this, income from 'sales, fees and charges' has fallen by half (51%) compared to pre-covid levels, the data show.
The vast majority of councils (84%) indicated they are likely to increase council tax next year by the maximum permitted amount, and 52% of councils believe they will be unable to balance their budget in 2024-25 without drawing on reserves.
Cllr Dennis said the most vulnerable people would be hit hardest by any further service cuts.
She said: "[For] instance those who benefit from our advice services and financial help to prevent them from becoming homeless. It would also hit the NHS which benefits from our work to keep people out of hospital and in good health through rehabilitation services at leisure centres and home adaptations for people who are at risk of suffering falls.
"Far from levelling up taking place, without additional support it is likely our places will look poorer, our people will have fewer opportunities, our environments will be less pleasant and the overall public realm will be in decline, unless we receive urgent help from the Government."
"We know public finances are tight but it is essential that our spending power rises by at least 6% next year to avoid the worst cuts. We also urge extra support for the services hit by the highest rising demand, such as providing temporary accommodation where current funding lags far, far behind our actual costs."
Adam Carey
