New grant funding will not resolve the systemic issues of local council finances

APSE has responded to the Chancellor's 2021 budget statement by calling for a more fundamental review of council finances. Speaking in response to the budget announcements, APSE Chief Executive, Paul O’Brien, and Chair of the Local Government Commission 2030 said, “Whilst any new funding is welcome Mr Sunak has left local councils with the equivalent of a ‘Bake Off’ soggy bottom – it looks okay on the surface but if you look at the underside it is all a bit undercooked”.

Whilst overall increases in funding amount to £8.5bn, to include council tax, taking the issue of the £4.8bn of new grant funding, over the next three years, Mr O’Brien questioned whether this would be enough to meet the existing gaps in frontline services. Such services are still reeling from pre-existing funding pressures, which mounted during COVID, in areas like environmental services; including local parks and bin collections; leisure centres and neighbourhood level services. O’Brien suggested that failing to properly fund social care, with the lion’s share of the new health and social care NI fund going to the NHS, will still leave the majority of council services “vulnerable to more cuts to stop care services falling over” and, he added, “it also begs the question about how seriously councils are regarded as delivery partners on climate change when this level of funding fails to deliver the leap in resources needed to meet climate ambitions”.

Mr O’Brien said, “The APSE Local Government Commission 2030 called for reform of Business Rates and consideration of an online transaction tax. These two matters have been announced by the Chancellor and are welcome. However, consultation on the online tax, as proposed by the Chancellor, needs to be both thorough and rapid; local councils cannot continue to limp on, whilst waiting for a fairer way to fund local public services. Local high streets and town centres need a radical and fair funding system that doesn’t penalise local business or turn once proud community places into ghost towns”.

A full APSE briefing on the spending announcements will be issued to APSE member councils.