Between 2010 and 2020, councils will have lost almost 60p in every £1 of central government funding. This has created an unsustainable gap in council funding that is having a significant impact on the services which local authorities deliver in their communities.
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.
- Between 2010 and 2020, councils will have lost almost 60p in every £1 of central government funding. This has created an unsustainable gap in council funding that is having a significant impact on the services which local authorities deliver in their communities.
- Councils 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.
- The extra funding in the 2018 Budget showed that the Government is listening to our call for investment to ease some of the pressure facing local services next year. This included an additional one-off £650 million for children’s and adults social care, and £420 million for roads funding.1
- There was new money from central government included in the provisional 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.2
- We are pleased that the Government has listened to our concerns and is providing an emergency injection of £350 million for Special Educational Needs and Disabilities capital investment, and high needs budgets, over the next two years3. However, it will only partially address the pressures councils face in providing SEND support this year.
- 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.4
- 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.