Laura Sharman 17 March 2016

Local government reacts to Budget 2016

Local government reacts to Budget 2016

Read our round-up of local government's reaction to the Budget 2016 announcement.

Lord Porter, chairman of the Local Government Association, said: 'Devolution deals agreed today are good news for local communities and councils which have worked hard to get them in place and rightly recognise the economic potential of England’s county and rural areas. To build desperately-needed homes, create jobs, provide the dignified care for our elderly and boost economic growth, all councils need greater freedom from central government to take decisions over vital services in their area.

'A total of 34 devolution proposals – from cities, towns and counties - have been submitted across England. These new deals and extensions to existing deals must signal a return to the early momentum in which similar deals were announced last year. This will clearly require different approaches for different areas, including how they are governed.'

Cll Paul Carter, chair of the County Council Network (CCN), said: 'CCN welcome the news that Government will not impose further cuts on local government in the short-term.

'Business rates discounts will come as a welcome boast to local high-streets, small and medium sized businesses. However, questions remain over how the £6.7bn of tax breaks will be funded.

'It is important that Government fully compensate councils for any loss of income. This should not be an additional financial burden for authorities, who will wholly rely local taxation by the end of the Parliament.

'In deciding where the new £3.5bn of unspecified savings in 2019/20 will fall, hopefully Government will respect their commitment to a fair and sustainable long-term financial settlement for councils.

'County councils have already delivered unprecedented efficiency savings to the public purse and will continue to do so during this Parliament. We cannot underestimate the challenges counties face in delivering balanced budgets and protecting the frontline services in the coming years.'

Cllr Neil Clarke, chairman of the District Councils’ Network (DCN), said: 'The vital role played by districts in supporting economic and housing growth is well-understood and DCN supports the clear link the Chancellor has made between business growth, increased housing and investment in infrastructure.

'In addition, the fact that two of the three devolution deals announced, East Anglia and Greater Lincolnshire, encompass some 25 district councils recognises the key role that district areas play in delivering growth.

'We are greatly encouraged that this is the first stage in advancing resources to recognisable economic geographies, where local people can influence decisions that not only affect their own community, but also contribute to the national economy.

'Today, the devolution journey has truly started in district areas, and these deals mark, DCN hopes, the first stage in advancing greater economic freedoms and increased powers to boost local growth, shape places and reform public service delivery for some 22 million people across England.

Ian Washington, lead local government partner at Deloitte, said: 'The future of local government looks even more uncertain than it did 24 hours ago. The question of how councils provide the best possible services to citizens, at the lowest cost, seems to have been lost in a patchwork quilt of local deals. Instead of clarity for citizens, with integrated and seamless services, these could make local government even more difficult to understand and navigate, further fragmenting the public service landscape.

'Those left out, or choosing to opt out, of the local deal making, will now be scratching their heads as to how they survive the mounting financial pressures. This will inevitably lead to a flurry of activity in the sector as councils try to put together more informal collaboration and joint working arrangements to share services and spread costs. Again, this approach will only add to the disjointed nature of provision across local government.'

Andy Mahon, partner at advisory firm BDO LLP, said: 'While the chancellor’s announcements on business rates appear good news for small businesses, they do pose questions for the ability of local government to continue to deliver services which businesses and their employees rely on. For councils comparing the Autumn Statement with today’s Budget, it could be a case of the lord giveth and the lord taketh away.

'The Government has made great play of the £26bn annual business rate pot being devolved to local councils from 2020. Today’s news of an increase in business rate thresholds and indexing to the lower Consumer Price Index, rather than higher Retail Price Index, suggests that the pot could, in reality, be smaller than many councils had expected by that date. In effect, councils might be getting 100% of a smaller pot rather than 50% of a larger pot.'

Andrew Jepp, head of public sector at Zurich Municipal, said: 'For the last six years, spending cuts have had a huge impact on the way local authorities deliver services. Local authority leaders already know they are facing a further 6.7% funding cuts over the next four years, so in spite of the Chancellor’s recent comment that “the world is a more uncertain place than ever before”, today’s announcement that the government needs to cut its spending by a further £3.5bn will come as no surprise to local authorities.

'However, the public should feel reassured that councils have been ably responding to these cuts since 2010. While these cuts inevitably mean a reduction in the delivery of local services, councils have increasingly turned to new and innovative methods to drive down costs, whilst at the same time maintaining services at a level that the public expects.'

'In the wake of new cuts, the challenge for local authorities will be to prepare for, and mitigate, any new risks that emerge from the changing delivery of services. With long-termism likely to dominate the approach taken by local authorities in the coming years, building in proper risk management from the start has never been so important – especially as we are likely to see little reprieve from the Chancellor in the coming years.'

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