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Spending Review critical to the future of local services – LGA responds to Chancellor’s announcement
“This Spending Review will be critical to the future of our local services with councils facing a funding gap of more than £6 billion over the next two years.
Responding to the Chancellor of the Exchequer’s announcement of a Spending Review, Cllr Pete Marland, Chair of the Local Government Association’s Economy and Resources Board, said
“This Spending Review will be critical to the future of our local services with councils facing a funding gap of more than £6 billion over the next two years.
“Councils hold the key to unleashing the full potential of local communities, tackling our national challenges, relieving pressure on the Exchequer and helping the Government achieve its ambitions. This can only happen if councils have the right powers, sufficient and sustainable funding that reflects current and future demand, certainty and multi-year settlements and less bid-based funding pots. Right now, councils are being pushed to the brink with rising adult social care costs, children’s placements and temporary accommodation.
"Councils have had to find billions in savings as a result of increasing demand for, and costs of, services alongside local government core spending power being reduced in real terms by around a fifth from 2010/11 to 2024/25. Any further funding reductions in the years ahead would be an unthinkable prospect with councils of all types already struggling to protect the services which bind our communities together and protect our most vulnerable from cutbacks.
“The current system of funding local government is out of date, opaque, overly complex, and limits the ability of councils to be more self-sufficient by raising income from other sources. In recent years, council tax has also increasingly been relied on too heavily to increase councils’ core spending power. While council tax is an important funding stream, it has never been the solution to the long-term pressures facing councils.
“The Spending Review should provide greater certainty over financial reforms and we urge the Government to set up a review to explore options to improve the local government finance system.”