William Eichler 03 July 2018

Council funding gap to reach £8bn by 2025

Local authority leaders have warned Whitehall that the next Spending Review will be ‘make or break’ for frontline services as councils face a funding gap of almost £8bn by 2025.

At its annual conference in Birmingham today, the Local Government Association (LGA) will launch a campaign to make the case for increased investment to support struggling local services.

By 2020, councils will have faced a reduction to central Government funding of nearly £16bn since 2010. This means local authorities will have lost 60 pence out of every £1 the Government had provided to spend on local services.

Next year, 168 councils will receive no more core central Government funding.

In a new report, published to coincide with the first day of the conference, the LGA estimates councils in England face a funding gap of £7.8bn by 2025.

‘We’ve reached a point where councils will no longer be able to support our residents as they expect, including our most vulnerable – let alone help the country to prosper,’ LGA chairman Lord Porter will say.

‘Councils have shouldered more than their fair share of austerity and have tried to reduce any impact on residents. But there is only so much they can do and the financial challenges they face are growing.’

Lord Porter will warn that the funding cuts over the last decade have undermined the provision of local services by councils.

‘Councils now spend less on early intervention, support for the voluntary sector has been reduced, rural bus services have been scaled back, libraries have been closed and other services have also taken a hit,’ he will say.

‘More and more councils are struggling to balance their books and others are considering whether they have the funding to even deliver their statutory requirements.’

‘If the Government allows the funding gap facing councils and the local services to reach almost £8bn by the middle of the next decade then our councils and local services will be damaged beyond recognition,’ Lord Porter will say.

‘The impact on society – all places, all generations, every person – will be hugely damaging. Millions of people will be deprived of the vital local services that help improve quality of life and bind communities together.’

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