William Eichler 22 May 2019

Councils warn of ‘draconian’ cuts to cover £50bn funding gap

Local authorities have warned that they may be forced to resort to the ‘bare minimum’ of service provision if no extra funding is made available.

An analysis of the financial sustainability of councils up to 2025 from PwC has calculated that increasing demand and rising costs could lead to councils needing an additional £51.8bn of funding over the next six years.

When broken down, PwC’s findings show that the 36 county areas are facing a £21.5bn funding gap up to 2025, while for metropolitan boroughs and London boroughs it is £13.3bn and £3.4bn respectively.

The County Councils Network (CCN), which commissioned the report, warned that another round of ‘draconian’ cuts to local services would have to be undertaken to fill in this funding hole.

Council tax rises, using their reserves, and making services more efficient and productive, will not be anywhere near enough to fill the funding gap.

If the Government does not increase local government funding, then councils would be forced to provide only a basic, ‘bare minimum’ core offer to residents, CCN added.

CCN also stressed that filling the more than £50bn funding gap would only keep services ‘standing still’ and would not improve them or reverse the last nine years worth of cuts.

Cllr Paul Carter, chairman of the CCN, said: ‘Over the last decade councils have played a crucial part in reducing the deficit, but the yearly compounding effect of funding cuts and rising demand means that the situation is fast becoming untenable.

‘This research demonstrates the need for government to provide all councils with additional resources at the Spending Review, with the most significant financial challenges being experienced by county and metropolitan authorities most in need.’

For more on this see, 'The self-sufficiency myth' in The MJ (£).

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