Chris Mahony 25 January 2019

LGA faces financial headache

LGA faces financial headache image

Smith Square has acknowledged the financial challenges it faces as it freezes subscriptions while grappling with declining Government grants and a pension scheme deficit.

A preliminary budget paper considered by the Local Government Association’s (LGA) leadership board this week assumes that the Improvement and Development Agency’s (IDeA) grant from the Ministry of Housing, Communities and Local Government will fall by 16% between 2017/18 and 2022/23 though the paper emphasises that the forecast is ‘for modelling purposes only’.

With balance sheet liabilities exceeding assets by £45m in March 2018 – largely due to the pension scheme deficits dwarfing the LGA’s assets – the paper notes that the association will need to continue to pay down the pension deficits.

The LGA will again have to use reserves to cover spending in 2019/20.

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