The 2020 Comprehensive Spending Review is a once in a generation opportunity to shape the direction of this country for years to come.
As we start to look forward, the Comprehensive Spending Review (CSR) is a once in a generation opportunity to shape the direction of this country for years to come. We need a collective effort to rebuild our economy, get people back to work, level up the inequalities some face and create new hope in our communities.
Responding to the significant economic challenges ahead requires renewed joint endeavour between local and national government as equal partners.
The highly-valued services we deliver – including public health, adult social care, children’s services, homelessness support, provision for the vulnerable and those in financial hardship – have been absolutely crucial to the initial COVID-19 response by protecting lives and livelihoods. Councils are ambitious for our communities now and into the future, and always stand ready with local solutions to the national challenges we face.
With the right powers, sustainable funding, and enhanced flexibilities local government can build on the positives we have achieved in the past few months and ensure our communities prosper for the future.
However, as things stand, many councils are in a precarious financial position. After a decade of reductions in funding and rising demand – from which we seemed to be beginning to emerge –councils, along with the rest of the nation, have faced the impact of the COVID-19 pandemic on their citizens, staff, services and budgets.
The funding gap could end up being as high as £9.8 billion by 2023/24
As part of its recent analysis commissioned by the LGA, the IFS estimated that councils face cost pressures of nearly £9 billion by 2023/24 in comparison to the 2019/20 starting point. When considering other pressures set out in its report, such as the fragility of the adult social care provider market and the impact of a future revaluation of pension funds, this could lead to a funding gap of £5.3 billion by 2023/24 even if council tax increases by 2 per cent each year and grants increase in line with inflation.
The IFS is also clear that we are still in a period of great uncertainty, with no allowance made for longer-lasting service demand impacts of COVID-19 to councils. The IFS’s upper estimates of all the pressures outlined above as well as challenges of recovering self-raised income suggest that the funding gap could end up being as high as £9.8 billion by 2023/24.
In addition to putting current services on a sustainable footing, councils need the resources to rebuild and recover on issues such as early intervention, public health, concessionary transport and others. Our submission sets out these further pressures on core funding in more detail.
Our CSR submission
Our CSR submission is separated into five distinct chapters and sets out how local government can act as the driver to achieve shared priorities between central and local government. Together, we can strengthen the UK’s economic recovery, level up economic opportunity, tackle social and health inequalities, improve outcomes in public services, achieve net zero carbon emissions and improve the value for money of public spending.
- Overall council funding
- Care and health inequalities
- Environment and climate change
- Economy and levelling up
- Great places to live