LGA responds to Autumn Statement

LGA media release 5 December 2012

Responding to the Autumn Statement, Sir Merrick Cockell, Local Government Association Chairman, said:

"Local government has borne the brunt of cuts to public spending so far and, while it is pleasing our campaigning has resulted in councils being protected from additional cuts next year, the extra two per cent cut in 2014/15 is unsustainable.

"Cutting council funding to help pay for nationally-administered economic stimulus programmes would be bad for local frontline services and makes no sense economically. Local government is one of the few parts of the public sector which actively promotes economic growth. It does that in every part of the country in a way which cannot be matched by Whitehall. The Government must enable that role rather than implement fresh cuts which will force councils to further wind down the essential support they can provide to local economic growth. A blinkered, centralist approach will undermine national economic prosperity, as the Government's own reports make clear.

"It is vitally important that a large portion of the money made available for schools and transport infrastructure finds its way to the local areas which can use it most effectively. Long-term underfunding has left our road network in a state of disrepair, while a lack of national investment in maintaining existing schools and a rapidly rising demand for additional school places has left a large number of state students studying in crumbling or inadequate classrooms. Councils have a number of school and road maintenance projects ready to go. They just need the money to get work started which would deliver an immediate boost to local economies and long-term benefits to students and motorists.

"While the Government has rightly heeded calls from the sector for no new cuts to the central grant councils receive from Government next financial year, local authorities already face a possible £1 billion cut to funding for 2013/14 on top of the 28 per cent reduction set out in the spending review and the further two per cent now announced for 2014/15. So far local authorities have largely restricted the impact of cuts to discretionary areas such as culture and environmental services, with councils working hard to protect spending on social care for children and the elderly. But even these areas are now facing reductions. That impact will only increase in line with any further cuts.

"The lateness of the Autumn Statement, which has pushed back the announcement of local government's financial settlement, is making it difficult for councils to plan for the next financial year. Combined with the uncertainty over what could be up to an unexpected extra £1 billion in cuts to council funding next year, this is creating a very damaging situation and must not be repeated in future.

"The LGA is currently in talks with the Treasury exploring ways to reduce the size and impact of any unexpected cuts in 2013/14."

£1 billion for schools

Responding to the announcement in the Chancellor's Autumn Statement that £1 billion of new funding will be spent on schools, Cllr David Simmonds, Chair of the LGA's Children and Young People Board, said:

"While Whitehall tinkering and bureaucracy has led to unnecessary delays in delivering national building schemes, councils have been getting on with the important job of delivering school places in areas with the greatest shortfall.

"Local authorities are in the best position to identify areas facing the greatest pressure for school places and act quickly to repair crumbling schools, expand existing ones and commission the building of new schools where necessary.

"It's now vital that this new additional funding flows quickly to address the shortfall in budgets and ensure local authorities can work with head teachers and parents to get on with the job of providing more school places where they are urgently needed."

Urban broadband announcement

Responding to the announcement in the Chancellor's Autumn Statement about which cities will receive Government funding for super-fast broadband, Cllr Flick Rea, Chair of the Local Government Association's Culture, Tourism and Sport Board, said:

"This announcement is a positive step towards better connecting communities in our cities. However, Government needs to focus on quickly securing the EU's permission to release the funding under state aid rules so councils don't have long delays before they can begin roll-out schemes, as they did with the rural programme."

Devolution

Sir Merrick said: "There needs to be a rapid and significant devolution of resources to local areas so councils and their partners in business can promote local economies and drive national growth. The boost in funding for Local Enterprise Partnerships (LEPs) and the Regional Growth Fund, alongside the reversal of cuts to councils' road maintenance budgets, are all steps in the right direction but more still needs to be done.

"It is vitally important that this money gets to local areas quickly and is not held up by overly bureaucratic bidding wars between different places. Up and down the country councils and their partners in business have already identified a number of shovel ready projects which can provide an immediate boost to the economy. We can't afford to see these projects stand unnecessarily idle while Whitehall departments argue the toss over where the money goes."

Skills
 
Sir Merrick said: "The devolution of responsibility for training and skills is a long overdue victory for the LGA and the sector. Successive national approaches to tackling youth unemployment have not worked, with too many young people being encouraged onto training courses that are unlikely to be a route into meaningful employment. It is important that all local partners have genuine levers to match the funding of courses and apprenticeships to employer demand in local economies."

Roads

Sir Merrick said: "The return of £330 million in road maintenance funding is a positive response to the LGA's lobbying in this area and goes some of the way toward reversing cuts which have been undermining councils' ability to keep the roads in good shape. This will help free councils from the false economy of constantly patching up a deteriorating network and allow them to carry out much-needed resurfacing and infrastructure projects. Decades of underfunding, combined with recent severe winters and widespread flooding, have left councils with a £10 billion backlog in repairs. We need proper, sustained investment if we are to genuinely turn the corner."

Housing

Sir Merrick said: "It is helpful that the Government has made funding available to accelerate the delivery of large housing sites, unlock stalled sites and speed up the release of public land for development. It is crucial that the Government and its agencies work closely with councils to manage the disposal of publicly-owned land and ensure that the public sector estate as a whole is used to best effect. Councils have a much better record of squeezing value from the public estate than their counterparts in Whitehall and any consolidation of management across government agencies should be locally led.

"The main barrier to new house building remains a lack of lending. Developers can't borrow to build and first time buyers are struggling to get mortgages. Until that is resolved the housing market will remain stagnant. A number of councils are offering support for residents to access mortgages and the LGA would like to see a stronger focus from Government in this area."

Community Budgets

Sir Merrick said: "It is pleasing to see a positive statement by the Government on the value of the whole-place Community Budget pilots in showing how better integration between local services can use money better. This can make a significant difference over the medium term. We now need to ensure that the barriers to rolling the whole-place approach out are removed and start to put this change into operation in the four pilots and elsewhere."

ends

Author: LGA Media Office
Contact: Local Government Association Media team, Telephone: 020 7664 3333

Notes to editors

The independent report into the role local authorities play in promoting economic growth, which was produced for the LGA by Professor Tony Travers, is available below:

Tony Travers' report: 'Local government's role in promoting economic growth' (PDF, 39 pages, 680KB)


6 December 2012

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