Councils in crisis with more tax rises and service cuts due revised 9 Feb

Report reveals English local authorities’ financial despair after decade of austerity.

https://www.theguardian.com/society/2020/feb/05/councils-in-crisis-with-more-tax-rises-and-service-cuts-due?CMP=Share_iOSApp_Other

Council tax payers in England face near universal rises on top of increased fees and charges to pay for what in many cases will be reduced levels of local services, according to a survey of local authorities.

It reveals that 97% of local authorities will put council tax up again in April to cope with a growing financial crisis, and the same proportion will raise charges for services such as parking, garden waste disposal and aspects of social care.

The latest State of Local Government analysis reveals widespread despair among councils over their financial health after a decade of austerity policies in which spending has been cut in half and the gap between demand and resources has grown.

More than a fifth of councils said the cuts to frontline services that they would be forced to make in 2020-21 were of a scale and impact that would be noticeable to the general public. One in 10 said shrinking resources meant they were in danger of being unable to meet their legal obligation to deliver statutory services.

Asked which services would have increased fees and charges, councils most commonly mentioned green waste, planning permissions, car parking, leisure and arts centre memberships, burials and cremations and pest control. One replied: “All we can get away with.”

Three-quarters of councils had no confidence that local government finance arrangements were sustainable, while only 3% were confident that the government would act to halt the council funding crisis, despite increasing pressures on child protection, adult social care and homelessness services.

Jonathan Carr-West, the chief executive of the Local Government Information Unit, a thinktank that carried out the annual survey, said: “The state of local government finances is dire. Eight years later and the message continues to be the same, a broken record. It is simply unacceptable that the government has let things get to this point.”

He added: “This isn’t local government asking for more money. This is about a fundamentally flawed system that has been broken for years and the government continually refusing to acknowledge or engage in a proper solution.

“Sticking plasters will not solve these critical issues. Our social care system is no longer on the edge, it’s fallen off the cliff. Our children’s services aren’t at breaking point, they’re broken. These issues cannot wait another year to be solved.”

Andrew Gwynne, the shadow communities secretary, said the survey should be a wake-up call for ministers. “The fact is that years of neglect have created this crisis. We need to see urgent action,” he said.

In the last few years there have been widespread cuts in some high-profile areas of local government such as Sure Start centres, youth clubs, special educational needs and libraries, as well as in less prominent areas such as planning, family support services and environmental health.

Scepticism that the government will pump more money into local government – or even publish its social care funding green paper, delayed since summer 2017 – has led many councils to consider alternative income streams, with 75% of surveyed councils reporting that they have borrowed to invest in commercial property schemes.

Two-thirds of councils said the current 3% cap on council tax increases – which councils can breach only if they get residents to agree to the rise via a local referendum – should be be scrapped to enable them to raise more cash from residents to fund local services.

A spokesperson for the Ministry of Housing, Communities and Local Government said: “Next year, councils in England will have access to £49.1bn – the biggest annual real-terms increase in spending power in a decade – including an extra £1.5bn for social care. The funding plans provide certainty for councils who are responsible for delivering the services their communities need.”

Update: The LGiU (The Local Government information Unit) and MJ (Municipal Journal) have collaborated on the State of Local Government Finance Report every January since 2012 to coincide with English councils setting their annual budgets. The results of their annual survey give a snapshot of the key pressures facing councils and the impact of ongoing financial uncertainty on their communities.

More detailed summary of statistics 2020 report here:

https://www.localgovernmentlawyer.co.uk/governance/396-governance-news/42693-one-in-seven-councils-predict-rise-in-judicial-challenges-over-service-provision-report

Full report here:

Click to access LGIU-State-of-local-government-finance-2020.pdf

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East Devon Watch

Posted on

6 Feb 2020

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Misc

Repair bill jeopardises Tory NHS pledges

The National Audit Office (NAO) has just published its eighth report on the financial sustainability of the NHS. The NAO has expanded on this report by publishing a companion report to set out the facts on capital investment in the NHS.

NHS financial management and sustainability

Review of capital expenditure in the NHS

The chaos is well summarised by Chris Smyth Whitehall Editor, The Times:

Boris Johnson’s NHS promises may not be met because of financial chaos and a mounting repair backlog in the health service, the spending watchdog has suggested.

Health chiefs have taken £4.3 billion out of the buildings budgets to bail out day-to-day overspends, and hospitals are having to sell land to get by, the National Audit Office has found.

Mr Johnson wants to build 40 hospitals, but a report to be published today states that long-term buildings and infrastructure planning has been delayed by “political events” and the NHS was struggling to come up with a capital spending strategy. A maintenance backlog has risen to £6.5 billion, some of it posing urgent risks to patient care. One in seven health service buildings predates the NHS’s founding in 1948.

The NAO also found that parts of the NHS had become “serious financially unstable”.

Gareth Davies, head of the NAO, said: “The short-term fixes that were introduced to manage the NHS’s finances are not sustainable. The Department of Health and Social Care continues to provide some trusts with short- term loans just to meet their day-to-day costs with little hope they will be repaid. This is not a sustainable way to run public bodies.

“To bring about lasting stability, the Department and NHS England and NHS Improvement need to move away from short-term financial fixes and provide longer-term solutions.”

Sally Gainsbury, of the Nuffield Trust think tank, said: “The government will shortly enshrine in law cash increases for the NHS England budget every year until 2024. But today’s report raises serious questions about whether this new money will make a difference.”