England & Wales Finance

LGIU MJ State of Local Government Finance Survey 2020

The LGiU and MJ 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 our annual survey give a snapshot of the key pressures facing councils and the impact of ongoing financial uncertainty on their communities.

The 2020 survey was sent to senior decision-makers at each of England’s 343 councils (council leaders, chief executives, cabinet members for finance/resources and directors of finance/resources) between 13th and 27th January 2020.

This year we received 195 responses from 152 individual councils, meaning that almost half of English councils are represented in the results. We received responses from a broad cross-section of councils, encompassing county, district and unitary authorities, a mixture of political control, and all regions. A full breakdown is included below.

The survey questions covered topics including income sources, confidence, service level spending and innovation.

Key findings include:

  • Nearly all councils (97%) plan to increase council tax in 2020/21, with most (93%) planning to raise it by more than 1.5%
  • Nearly all councils (97%) plan to increase fees and charges in 2020/21, with some being forced to raise them ‘by the maximum possible amount’ (14%)
  • Confidence in the sustainability of local government finance remains very low, with three quarters (74%) of councils saying they do not feel confident
  • 1 in 10 councils (12%) say they are in danger of being unable to fulfil statutory duties this year and 1 in 7 councils (14%) said they anticipate an increase in judicial challenges to the level of service provision this year
  • Children’s Services & Education was the top immediate pressure, while Adult Social Care remains the top longterm pressure
  • For over half of councils (59%), the Public Works Loan Board interest rate rise has forced them to alter their 2020/21 financial plans
  • 77% lack confidence in 100% Business Rate Retention as a mechanism to fund local government. Nearly all councils (98%) say they are planning work to tackle climate change
  • There was near universal disappointment in the Government’s progress delivering a sustainable funding system for local government (97%) and a longterm social care strategy (98%)

Read the full report here.