COUNCILS RESPOND TO SPENDING REVIEW

Responding to the Spending Review, Cllr James Jamieson, Chairman of the Local Government Association, said:

“Council services have been critical in the fight against COVID-19, protecting the most vulnerable, supporting our local businesses and keeping the country running. It is good that today’s Spending Review provides a potential increase of 4.5 per cent in council core spending power to support these vital local services. However, this assumes council tax bills will rise by 5 per cent next year which will place a significant burden on households.

“It is good that the Chancellor has provided further funding for councils to manage the cost pressures they face as a result of the pandemic. New funding for adult and children’s social care will also help address some – but not all – of the pressures these services face next year. Councils will still have to find savings to already stretched budgets in order to plug funding gaps and meet their legal duty to set a balanced budget next year.

“As we look to build back better from the devastating social and economic impact of this crisis, this will be a blow to our communities and will hamper local and national recovery efforts. 

“Councils will continue to face demand pressures on day-to-day services – some pre-existing and others made more significant by the impact of COVID-19 – amid substantial income losses. The Chancellor’s pledge to compensate for 75 per cent of irrecoverable council tax and business rates income and to extend the scheme to fund a portion of councils’ lost income from fees and charges during the early part of the next year provides some much-needed stability but will need to be kept under review and probably extended.

“Council tax rises – particularly the adult social care precept – have never been the answer to the long-term pressures faced by councils, particularly in social care, raising different amounts of money in different areas, unrelated to need. It is not the long-term solution which is desperately needed.

“We have warned about record numbers already claiming a discount on their council tax due to the pandemic and are pleased the Government will provide funding to help councils provide vital support for those on low incomes who may struggle to pay.

“Overall, the Spending Review provides some certainty for councils next year but the long-term outlook remains unclear. Public finances will undoubtedly be under huge strain in the years ahead but investment in our local public services is critical to our national recovery next year and beyond. Only with the right funding and freedoms, can councils lead local efforts to level up the stark inequalities the pandemic has exposed and level up the economy so that it benefits everyone.”