Local authorities will face an overall funding gap of £3.1 billion in 2019/20, which we estimate will rise to £8 billion by 2024/25. The pressures are particularly acute in adult social care, children’s services and homelessness support.
Key messages
- Councils are uniquely placed to build communities that are inclusive, cohesive and promote people’s life chances. They do this by tailoring more than 800 local services to the needs of their residents, creating solutions to specific, local challenges.
- Local authorities will face an overall funding gap of £3.1 billion in 2019/20, which we estimate will rise to £8 billion by 2024/25. The pressures are particularly acute in adult social care, children’s services and homelessness support.
- Investing in councils will have a positive effect on wider economic growth and the public finances. Research suggests that putting money into infrastructure and services such as social housing, local roads, and green spaces is good for the overall economy.
- There was new money included in the local government finance settlement for 2019/20, including £20 million to ensure no changes to the New Homes Bonus threshold. The Government also made an extra £16 million available through the Rural Services Delivery Grant, and cancelled ‘negative Revenue Support Grant’
- Councils have responded to the financial challenge by streamlining services and finding new ways of operating. There are 550 shared services arrangements among councils, which have achieved £805 million of cumulative efficiency savings.
- It is vital that the Government uses the 2019 Spending Review to deliver truly sustainable funding for local government. Investing in local services is good for the nation’s prosperity, economic growth and overall health and wellbeing.
Download the full briefing
Debate on the economy in light of the Spring Statement, House of Lords, 20 March 2019