William Eichler 12 October 2021

Chancellor has ‘little or no scope’ to increase local government funding

Chancellor has ‘little or no scope’ to increase local government funding image

The Chancellor is going to struggle to find money for cash-strapped local authorities despite planning to implement the biggest tax rises in 25 years, think tank says.

The Institute for Fiscal Studies (IFS) has reported that the Government’s planned £28bn package of tax rises – announced in the March 2021 Budget – will increase the UK’s tax take to its highest sustained level in peacetime.

The IFS also reported that Chancellor Rishi Sunak is overseeing an historic increase in the size of the state. Spending will settle at 42% of national income, more than 2% above its pre-pandemic level and its highest level ‘in normal times’ since 1985.

However, despite the increase in taxation and the expansion of the state, the 2021 IFS Green Budget calculates that the Chancellor will have to increase spending on services other than health, defence, schools and aid by less than he was planning pre-pandemic in order to balance the budget, and may even have to implement cuts to some budgets over the next two years.

Paul Johnson, IFS Director and an editor of the Green Budget, said: ‘Rishi Sunak, a Conservative Chancellor, is presiding over an increase in the tax burden to record levels in the UK and an increase in the size of the state (public spending as a fraction of national income) to levels not seen since the days of Mrs Thatcher.

‘Yet the combined effects of ever-growing spending on the NHS and an economy smaller than projected pre-pandemic mean that he is still likely to be short of money to spend on many other public services.

‘On central forecasts, there will be little or no scope to increase spending on things like local government, the justice system and further education, after a decade of sharp cuts.

‘That said, he still faces huge uncertainty over the direction of the economy and hence over the state of the public finances. He will be hoping against hope that stronger-than-expected growth in revenues over the next few years will help to dig him out of what still looks like a fair-sized hole.’

Overcoming the barriers to Commercial Card use image

Overcoming the barriers to Commercial Card use

Want to reap the benefits of Commercial Cards but coming up against some challenges? James Sykes, Head of Commercial Cards, Lloyds Bank and David Legg, Head of Corporate Card Products, Lloyds Bank, discuss how the payments industry is helping organisations unlock their true value.
SIGN UP
For your free daily news bulletin
Highways jobs

Senior Project Manager

Leicestershire County Council
Up to £50,823 per annum
The role of this post is to oversee the project management, development and implementation of the County Council’s Major Transport Projects.. Leicestershire
Recuriter: Leicestershire County Council

Programme and Change Delivery Manager (Spatial Planning and Urban Design)

London Borough of Richmond upon Thames and London Borough of Wandsworth
£43,833 - £53,115 Depending on skills and experience
Are you a change delivery manager with expertise in England’s local government spatial planning and urban design sector? Wandsworth, London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Early Years Practitioner

The Royal Borough of Kensington & Chelsea Council
£26,544 - £30,618 per annum pro rata
This is a diverse area and we have high aspirations for all our children, starting with... Kensington and Chelsea, London (Greater)
Recuriter: The Royal Borough of Kensington & Chelsea Council

Programme Manager - Association of Directors of Children’s Services

City of York Council
£50,000 to £60,000 pa
This role will help to shape an annual SLI work plan and variously oversee, facilitate, commission or directly deliver and... York, North Yorkshire
Recuriter: City of York Council

School Wellbeing Worker

City of York Council
£27,614 to £30,602 per annum
The role will involve providing schools with consultation and advice, training, direct work in... York, North Yorkshire
Recuriter: City of York Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue