On behalf of its membership, the cross-party LGA regularly submits to Government
consultations, briefs parliamentarians and responds to a wide range of parliamentary inquiries. Our recent
responses to government consultations and parliamentary briefings can be found here.
Between 2010 and 2020, councils will have lost almost 60p in every £1 of central government funding. This has created an unsustainable gap in council funding that is having a significant impact on the services which local authorities deliver in their communities.
We are calling for the Government to address the overall funding gap of £5.8 billion facing local government by the end of the decade, and to provide an additional £1.3 billion required to stabilise the adult social care provider market.
For local government to maximise its potential and to protect local services from further cuts, it must be made financially sustainable and truly independent.
In this submission we detail the unfunded cost pressures facing local government and why, with many local services facing significant funding gaps, it is vital that the Budget recognises that councils cannot continue without sufficient and sustainable resources.
We are deeply concerned that the proposed risk-mitigation measures in clause 71 of the Bill potentially give the Secretary of State significant powers to intervene in a local authority. There is a danger that the formula-based approach outlined in the Bill could impact more widely than intended. It is vital that the Government undertakes full engagement with the sector, including full consultation before enacting the regulations arising from the Bill.
Business rates account for around a quarter of all council spending power. Money raised is used to pay for vital local services, such as caring for older and disabled people, protecting children, fixing potholes and collecting bins.
The valuation of non-investment assets for financial reporting purposes has been a contributory factor to the current crisis in local audit and how the valuation of such assets is audited is an area that needs to be addressed if the crisis is to be solved. Clearly how the assets are valued in the first place is an important step in that and we are in broad agreement with the proposals in the consultation for most asset classes. However, the proposals for valuing networked assets (usually called “infrastructure assets” in local authorities) will cause significant problems and additional costs for councils and we suggest that an alternative and more practical approach should be taken to valuing them.
The consultation paper was issued before strict measures were implemented to address the COVID-19 pandemic. However, the financial environment for local government has changed so profoundly that we cannot overlook the issue.