Nearly all councils plan on raising council tax this year and increasing charges to make up for cuts in central government funding, the 2019 State of Local Government Finance Survey has found.
Of the councils that responded to the Local Government Information Unit (LGiU) and The Municipal Journal survey, more than half (53%) are eating into their reserves to stay afloat, four out of five (81%) are investing in commercial developments while nearly half were planning on cuts to services. Eight in 10 senior council decision makers believe the current system for council funding is unsustainable.
A quarter of councils said planned cuts to services in the coming year would be noticed by the public. Worryingly, the financial situation is so bad for one in 20 councils (22 councils in England) that they are concerned they won’t be able to deliver the legal minimum service for residents.
Chief executive of the LGiU, Jonathan Carr-West, said: “With more cuts ahead, local councils have no option but to take drastic measures to make ends meet. In the future care for the elderly and vulnerable children could be funded from shopping centre investments and car parks, which carries significant risk if the economy tanks.
“Now more than ever do we need a thriving, resilient local government sector to weather the storm of national uncertainty, but years of chronic under-funding has left local government on life support.”
Editor of The Municipal Journal, Heather Jameson, said: “After nearly a decade of slashing local government funding councils have been hollowed out to nothing. People will be left paying more council tax and seeing less and less for their money. They deserve better.
“If central Government is serious about tackling the housing crisis and rebuilding our communities after Brexit, they will need to rethink local government funding – fast.”
Children’s services and education is councils’ top immediate financial pressure for the second year running (36% of councils), ahead of adult social care (23%) which has historically ranked highest. However, adult social care is still under severe strain, being named as the top long-term financial pressure (37% of councils).
Gang activity, including county lines operations, was identified as a top pressure on children’s services by one in 20 upper-tier councils (6% placed in their top three), all of which were located in the South East, London and the Midlands.
Local authorities have already seen their central funding reduced, on average, by 40%. Respondents to the survey admitted they would be further reducing activity in arts and culture (46%), parks and leisure activities (45%), roads (38%), libraries (32%) waste collection (22%) and recycling (11%).
Concerningly, services for vulnerable people are also facing cuts, with councils planning to reduce activity in adult social care (29%), children’s care services (24%), special education and disability support (16%), homelessness support (11%) and funding for local Citizens’ Advice Bureaus (18%).