Laura Sharman 24 November 2016

Local government 'worried' about what wasn't in Autumn Statement

The chancellor has been blasted for what he failed to mention in yesterday’s Autumn Statement, including funding for social care and devolution beyond the major cities.

The local government sector was quick to react to the lack of information on how the soaring social care funding gap would be closed.

Unison voiced their disappointment at a lack of extra cash for social care. General secretary Dave Prentis said: ‘Instead the government has chosen to ignore social care, preferring to look the other way as a growing number of elderly people are getting no care at all.

‘Scrimping on social care is a huge false economy. Older people are often stranded in hospitals, unable to go home, using beds needed by other patients. This turns up the heat on our already overstretched NHS, which has also been forgotten about today.’

Jonathan Carr-West, chief executive of the LGiU also criticised Mr Hammond for blaming higher spending by local government as one of the causes of a weaker economic outlook.

He said: ‘What will really worry local government will be what the chancellor didn’t talk about. Nothing about the role of local government in allocating and spending the National Productivity Investment Fund. Nothing about devolution beyond the major cities. Nothing about funding for social care.

‘And nothing about how business rate retention is going to work and how local government will be financed in the medium to long term. This was presented as an upbeat Autumn Statement, but between the lines there was nothing for local government to celebrate.’

Lord Porter, chairman of the Local Government Association, agreed that the councils would face an ‘extremely challenging’ over the next few years to tackle the £5.8bn funding gap by 2020.

Lord Porter said: ‘Many councils are faced with difficult decisions about which services are scaled back or stopped altogether. The Government must allow local government to use the extra business rates income it will keep by 2020 to plug this growing funding gap.

‘The ability to fix longer-term funding settlements has been important for councils and something we have long called for. Given the majority of councils have taken up the option, the Government now needs to publish the Local Government Finance Settlement as soon as possible. This will give councils more time to plan for the difficult funding decisions which lie ahead.’

The fact devolution deals are only been made available to major cities has also been criticised, with many calling for powers to be extended across other parts of the country.

Cllr Neil Clarke, chairman of the District Councils’ Network (DCN), said: ‘To help rebalance the national economy, new mayoral borrowing powers granted to Combined Authorities, and further devolution of powers for adult education and employment support services to London and Greater Manchester, should be more widely available as part of devolution deals to other parts of England.’

Mark Morrin, principal research consultant at Respublica, said: ‘The announcement of further city deals in Scotland, where all cities will now have a city deal; and in Wales, where the Swansea Bay City Region now joins Cardiff Capital Region in achieving its city deal, leaves Northern Ireland as the only region in the UK yet to arrive at such a settlement. Belfast, where ResPublica has been calling for a devolution deal, is a conspicuous absence.

‘Additional borrowing powers for Metro-mayors is welcome given their new responsibilities, but where similar devolved functions are performed by shire counties they should also receive the same borrowing powers.’

Judith Barnes, partner at law firm Bevan Brittan, added that wider borrowing powers were also needed: ‘With devo deals in the order of £6bn on health and social care in Greater Manchester and 10 year deals around £1bn elsewhere, the potential for local growth was in danger of being severely hampered without wider borrowing powers to leverage the grant money and revolving funds provided, as well as to fund working capital and set-up costs pending receipt and distribution under local levies.

'It is hard to think of any other public body that does not have the power to borrow for the purposes of its functions.’

Visit The MJ (£) to read their analysis of the state of public finances.

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