LGA responds to IFS report on Levelling Up funding

Responding to an IFS report which states how public service funding cuts is putting the Levelling Up agenda in danger, Cllr Andrew Western, Chair of the Local Government Association’s Resources Board, said:

“Levelling up is at the heart of what councils want for their communities. As this report rightly highlights, levelling up will only be turned into a reality if councils have the powers and funding they need to address regional inequality, tackle concentrations of deprivation and make towns and communities across England attractive places to live, work and visit.

“The dramatic increase in inflation, alongside increases to the National Living Wage and higher energy costs, has added at least £2.4 billion in extra costs onto the budgets councils set in March this year. With local government then facing a funding gap of £3.4 billion in 2023/24 and £4.5 billion in 2024/25 it is clear that the Government needs to come up with a long-term plan to manage this crisis.

“It is also crucial that local services have a long-term, sustainable future which gives councils certainty over their funding. This includes the urgent need for clarity from the Government on which local government funding reforms will happen and when. We have urged the Government to push ahead with the Fair Funding Review, including looking both at the data and the opaque and complex formulas used to distribute funding and ensuring no council sees its funding reduce as a result.

“Regardless of how current funding is distributed, it will clearly be insufficient to prevent cutbacks to the services that will be vital to help the Government achieve its ambitions for growth and to produce a more balanced economy, level up communities and help residents through this cost-of-living crisis. It would only be sustainable if it is delivered together with sufficient additional funding.”