Local authority leaders have urged Prime Minister Rishi Sunak ahead of the upcoming autumn statement to ensure that councils have the funding necessary to protect local services.
A new report from the Resolution Foundation has outlined the options available to Chancellor Jeremy Hunt in his autumn statement – scheduled for 17 November – as the Treasury attempts to tackle the £40bn fiscal hole in the UK’s economy.
The think tank argues that the Government could cut investment, but warns this would damage growth and only lead to around £10bn of savings. It also says that the Chancellor could renege on pledges to raise working-age benefits and the State Pension in line with prices next year (saving £9bn) or increase taxes by, for example, reinstating the Health & Social Care Levy (raising £15bn by 2026-27).
The other option outlined by the Resolution Foundation is more austerity. Government departments, however, are already seeing their budgets fall in real terms by around £22bn by 2024-25 due to inflation. Against this backdrop, the think tank calculates it will be hard to save more than £20bn with cuts to public services.
Local authority leaders warned the Government against further austerity measures, arguing that councils are already struggling to deliver services after over a decade of cuts.
Responding to the report, Cllr James Jamieson, chairman of the Local Government Association (LGA), said: ‘The future financial sustainability of councils and local services is on a cliff-edge.
‘In the past decade, councils have done more than their fair share of the heavy lifting when it came to putting public finances on a more sustainable footing, having faced a £15bn real terms reduction to core government funding between 2010 and 2020.
‘The Government needs to ensure councils have the funding to meet ongoing pressures and protect the services that will be vital to achieve its ambitions for growth and to produce a more balanced economy, level up communities and help residents through this cost-of-living crisis.
‘Without certainty of adequate funding for next year and beyond, and given the funding gaps they face, councils will have no choice but to implement significant cuts to services including to those for the most vulnerable in our societies.’
