A good day to bury bad news: little relief for cash-strapped local government
As the media was focussing on Tuesday’s Brexit vote in the Commons, this morning only subscribers to the New Statesman read about the written statement by the secretary of state for housing, communities and local government, James Brokenshire.
In what the writer, Anoosh Chakelian (right), said is becoming a bleak pattern, the government chose Theresa May’s second attempt to pass her Brexit deal on which to publish its statement on local government finance.
A reassuringly generous set of dispensations?
The statement by James Brokenshire (left) opens with eight substantial paragraphs detailing increased funding in a wide range of sectors, summarised in the New Statesman:
“As first announced in the Budget, the government is releasing extra chunks of funding for social care and potholes, as well as more money for high streets. The government calculates that its settlement adds up to a rise in core spending power for councils from £45.1bn in 2018-19 to £46.4bn in 2019-20: a 2.8% cash increase. (It has also reiterated the £56.5m across 2018-19 and 2019-20 to help councils prepare for Brexit, which we can’t really count as extra funding as it’s to fill a Brexit-shaped hole.)”
Councils are to be awarded £56.5 million across 2018-19 and 2019-20 to help prepare for EU Exit. It lists “a broad package of measures and confirms that Core Spending Power is forecast to increase from £45.1 billion in 2018-19 to £46.4 billion in 2019-20”.
This information is meaningless to the general public. Are they going only to the 117 largest councils listed here, or should district councils and London boroughs be included? And will they be distributed according to need, population, or other criteria?
Anoosh Chakelian’s verdict: Far from generous. She points out that after eight years of austerity, cash-strapped councils will still face a funding gap of more than £3bn this year, according to the Local Government Association.
She adds that the pressure to set legal budgets, with an average 49% drop in real terms spending power since 2010 and rising social care demands, means that councils need substantially more than a 2.8% rise.
Decisions on business rates retention and a fair funding formula for local government have been postponed, despite the planned consultations having taken place and their findings published.
Noting that the long promised green paper on adult social care has not appeared and the funding announced is ’a short-term one-off’, she quotes the head of the National Audit Office, Amyas Morse, who said last March: “Current funding for local authorities is characterised by one-off and short-term fixes, many of which come with centrally driven conditions.”
Though James Brokenshire asserts that this settlement answers calls for additional funding in 2019-20, and paves the way for a more self-sufficient and reinvigorated system of local government, Anoosh Chakelian concludes: “This means councils will continue to operate in a financial void, unable to fund public services properly, while waiting for something to change in the promised Spending Review later this year”.