LGA: Town Halls face an £8bn cash ‘black hole’

The Local Government Association – the LGA – says councils in England will face a funding gap of £7.8 billion by 2025, and that simply plugging this gap would just keep services standing still and would not include any funding needed to improve services or reverse any cuts made to date.

The declaration is the scene setter for the LGA’s annual conference in Birmingham today, where  more than 1,300 local government leaders, councillors and ministers are set to debate the present and future of the UK local authority.

Its data suggests that by 2020, local authorities will have faced a reduction to core funding from the Government of nearly £16 billion since 2010. That means, it claims, that councils will have lost £0.60 out of every £1 the Government had provided to spend on local services.

Next year, it adds, 168 councils will receive no more core central government funding at all.

The IT angle here is critical, as LGA says councils have responded to the financial challenges they face by finding new and innovative ways of operating such as sharing services, while still delivering the vital services their residents rely on.

The claim, though, is despite the best efforts of local government, “this is no longer enough to protect the local services which are “on the brink of collapse” and facing huge and increasing demand pressures”.

“We’ve reached a point where councils will no longer be able to support our residents as they expect, including our most vulnerable – let alone help the country to prosper,” warns the group’s Chair, Lord Porter.

“Councils have shouldered more than their fair share of austerity and have tried to reduce any impact on residents, but there is only so much they can do and the financial challenges they face are growing.

“Councils now spend less on early intervention, support for the voluntary sector has been reduced, rural bus services have been scaled back, libraries have been closed and other services have also taken a hit. More and more councils are struggling to balance their books and others are considering whether they have the funding to even deliver their statutory requirements.

“If the Government allows the funding gap facing councils and the local services to reach almost £8 billion by the middle of the next decade then our councils and local services will be damaged beyond recognition. The impact on society – all places, all generations, every person – will be hugely damaging.

“Millions of people will be deprived of the vital local services that help improve quality of life and bind communities together.”

The group describes itself as a politically-led, cross-party organisation that works on behalf of councils to ensure local government has a strong, credible voice with national government, with a specific aim to influence and set the political agenda on the issues that matter to councils so they are able to deliver local solutions to national problems.