One in three councils fear inability to fulfil statutory duties

LGA conference underway with councils now facing “real risk” to future financial viability.

Monday 1

Tasked with taking a lead on house building, one in three English councils fear they will be unable to fulfil statutory duties in areas such as homelessness prevention by the end of the present Parliament.

The LGA annual conference starts today (2nd July), with the financial prospects for councils so dire that within months nearly one in five in England may be forced to further squeeze spending to stave off bankruptcy.

According to an LGA survey, councils have little confidence they in their ability to deliver already tough savings targets they had set themselves for this financial year and would have to go back for extra cuts to meet their legal requirement to balance their budgets.

A further one in three councils surveyed said prospects were so bleak that within three years they would be unable to meet their statutory obligation to provide an adequate service in core areas such as adult social care, child protection, and homelessness prevention.

LGA chairman Lord Porter warns of a “real risk” to the future financial viability of some services and councils with adequate funding and support from central government.

And the need for funding guarantees was now urgent, he said, with possibility of the government’s three-year spending review being put off amid uncertainty around the Brexit deadline and Tory leadership contest.

“Councils would normally have started their budget-setting planning process but remain completely in the dark about how much funding they will have next year – communities relying on the vital local services that make a difference to their lives deserve better,” said Lord Porter.

“Securing the financial sustainability of local government must be the top priority for the next prime minister – urgent guarantees are needed that councils will have the funding they need to ensure our vital public services survive the uncertainty ahead,” he said.

Even if councils can secure an emergency one-year ‘rollover’ financial settlement for 2020-21, this will lock austerity in for a 10th successive year, raising fears that a further round of cuts and redundancies will critically undermine the quality and safety of day-to-day services.

LGA estimates suggest that between 2010 and 2016, councils will have lost 60p out of every £1 they received from central government.

By next April, the gap between council resources and demand will be £3bn, rising to £8bn by 2025, fuelled by wage inflation and the rising costs of adult and child social care.

The LGA survey was completed by 141 out of 339 LGA member councils between 28th March and 5th June.

In the face of this, MHCLG pitches the £46.4bn available to councils this year – a sum seen as a real-terms increase and including extra funding to support vulnerable groups.