Sustainable local government finance and liveable local areas: Can we survive to 2020?
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.