£1.3bn government funding cut next year

The Local Government Association has warned that government grant funding for local services will be cut by a further £1.3 billion in 2019/20, despite current overspends and in-year budget cuts.

The association claims that 168 councils will no longer receive any this Revenue Support Grant funding next year, meaning that between 2010 and 2020, councils will have lost 60p out of every £1 the government had provided for services.

The LGA warns that the already unstable financial viability of some councils is now under further threat, with many authorities increasingly unable to provide dignified care for our elderly and disabled, protect children, boost economic growth, fill potholes, build homes and much more. Rising demand for services, coupled with funding pressures, are already set to leave local services in England facing a £3.9 billion funding black hole next year.

Therefore, local government leaders are urging Chancellor Philip Hammond to use the Autumn Budget to tackle the immediate funding crisis for local government in 2019/20, as well as set the scene for the forthcoming Spending Review to deliver a sustainable funding settlement for local government.

Richard Watts, chair of the LGA’s Resources Board, said: “Losing a further £1.3 billion of central government funding at this time is going to tip many councils over the edge. Many local authorities will reach the point where they only have the funds to provide statutory responsibilities and it will be our local communities and economies who will suffer the consequences.

“In his Spring Statement in March, the Chancellor said he would invest in public services if public finances improve as recent forecasts have suggested. It is therefore vital that the government addresses the growing funding gaps facing councils in 2019/20 in the Autumn Budget. If the government fails to adequately fund local government there is a real risk to the future financial viability of some services and councils. If the residents of Anycouncil face the prospect of closures to leisure centres and libraries, cuts to vital home care for the elderly and more potholes on local roads, then millions of residents are living in areas where their council will be forced to do the same.

“Investing in local government is good for the nation’s prosperity, economic growth and for the health and well-being of our nation. It will boost economic growth, reduce demand for services and save money for the taxpayer and others part of the public sector.”

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