By 2020, the combined current and capital spending by UK local government will be lower than at any time since before 1948, finds new research from APSE and NPI. ‘Sustainable local government finance and liveable local areas: Can we survive to 2020?’ reveals that many of the things which local authorities in the UK have taken for granted for decades will be gone by 2020.
Should current trends continue, council tax, until recently a minority source of local government finance, will account for at least half the money coming in to all English local authorities by 2020. For shire counties, it will account for three quarters. By 2020, the revenue support grant will be mainly confined to metropolitan and unitary districts, and London boroughs, which means that shire counties and districts will be almost entirely reliant on council tax and business rates.
The research found that whilst recent settlements mean the more deprived authorities will not see significant further decreases in funding by 2020, a new dimension of inequality is opening up according to how strongly an authority can grow its business rate income. Speaking at the launch of the research, Dr Peter Kenway, lead research author from NPI, said ‘The new financial framework for local authorities breaks the link between need and source funding. There are no guarantees that ability to raise business rates will match needs in the most deprived areas’.
Paul O’Brien, Chief Executive of APSE, said ‘With huge funding pressures on local councils this report highlights the hidden costs of decline in council finances. Whilst new funding for social care is of course welcome, the overall picture for local council finances remains grim. Without adequate funding we risk abandoning liveability services like parks, refuse and recycling, highways, and street lighting to long term decline.’
The report advocates a sustainable future for liveability and public realm services. Allowing liveability services to decline through a lack of funding will force up ancillary care demands at a neighbourhood level, reveals the report; it is focused on helping local government understand the next few financial years and reflects the announcements in the Chancellor’s Spending Review, including the social care precept, full business rate retention, and changes to council tax. The report explores the precarious financial position placed upon frontline services and, in a series of recommendations, calls upon councils to ensure sufficient future funding for frontline services, recognising the impact of such services on the quality of life for local residents, and providing good places for businesses to locate.
Notes to editor
APSE is the Association for Public Service Excellence, a not-for-profit local government body working with over 300 councils throughout the UK promoting excellence in public services. APSE is the foremost specialist in local authority frontline service providers in areas such as waste and refuse collection, parks and environmental services, leisure, school meals, FM services, housing and building maintenance.
NPI is the New Policy Institute a UK research institute which produces evidence-based research on a range of social and economic issues.
The research was produced by drawing upon analysis of local government financial information and data and two round-table discussions comprising of local government finance experts, APSE members, councillors, and third sector and union representatives.
The research is to be launched at Portcullis House, Westminster on Tuesday 26 April 2016.
Press copies of the report are available on request from APSE. To arrange for interview please email Mo Baines firstname.lastname@example.org or call 0161 772 1810 or email Sophie Bannister on email@example.com