Local authority leaders representing urban areas have warned the Prime Minister that the new year could see a ‘surge’ of section 114 notices being issued unless there is a last-minute intervention.
A letter from the Special Interest Group of Metropolitan Authorities (SIGOMA) to Rishi Sunak says the proposed funding settlement of £64bn from the Department of Levelling Up, Housing and Communities will add about £4bn to budgets in 2024/25.
This 6% increase is ‘not nearly enough to fix the financial situation councils find themselves in’, SIGOMA warned.
The £1bn in the funding settlement associated with adult social care will do little to address the £1.5bn required to maintain the current levels of service. There is also no new money for children’s services, which are facing a £1.6bn funding shortfall.
Around half of the rise comes from ‘regressive’ council tax rises, SIGOMA added.
‘The local government finance settlement is a last resort and must be used to stabilise council finances. Without this support, as we head into next year, the current proposals by the Government will see a surge of S114 notices,’ the letter reads.
Separately, Clive Betts, chair of the Levelling Up, Housing and Communities (LUHC) Committee, has also written to Secretary of State Michael Gove urging him to set out what advice and support it is providing to councils to help them plan for predicted cuts.
‘[I]n the wake of the Autumn Statement and the OBR’s [Office for Budget Responsibility] forecasts, many councils will need to confront the implications of forecasted annual cuts in unprotected spending now when setting their medium-term financial plans,’ he said.
‘The Secretary of State should spell out what his department is doing now to help councils plan for potential funding cuts and what assistance they are providing to ensure councils can deliver their services.’
If this article was of interest, then check out, 'Can local government take much more?', 'Preventing future Section 114 notices' and 'How to fix local government finance'.
