Councils’ “spending power” will fall by more than three times the amount the government has claimed it will, according to new analysis
Figures published by the Chartered Institute of Public Finance and Accountancy show the figure will fall by 6% in 2015-16. Local government minister Kris Hopkins said today that it would fall by 1.8%.
Cipfa’s analysis uses a different definition of “spending power” to that used by the government. Its analysis does not count ringfenced grants or the better care fund, much of which is used to fund NHS services. Cipfa argues this should not be counted because it is outside councils’ control.
Its analysis also shows central government funding to local government will be cut by 14.6% in 2015-16.
Cipfa found spending cuts were “falling most heavily upon areas of the greatest need”. The figure would fall by 8% in London and 7.8% in the north east, it said, compared to just 3.4% in the south east.
Rob Whiteman, chief executive of Cipfa, said: “The difference between what has been presented today by the government and the actual cash figures for cuts to local councils is stark.
“It demonstrates why we urgently need transparency about government funding instead of this continued conflation and inflation spending which hides the true size and scope of the cuts many local authorities face.”
Mr Whiteman said the government’s decision to include the better care fund towards its spending power calculation was “seriously distorting” the figures.
“Once you peer behind the opaque measurement of funding used today, you see that the disparity of impact across the country and between different types of authority is significant and needs to be considered carefully by policymakers,” he said.
The LGA has also criticised the government’s use of figures.
Analysis by the organisation has found that the 1.8% cut to councils’ “spending power” translates into an 8.8% cut to government grant.
The LGA claimed councils would have to save £2.6bn next year.
Its analysis found cuts to core government grants totalled 40% since 2010, and that councils had made savings worth £20bn in that period.
David Sparks (Lab), chair of the LGA, said: “Today’s settlement confirms the huge financial challenge local services now face.
“It is individuals who have paid the price of funding reductions, whether it is through seeing their local library close, roads deteriorate or support for young people and families scaled back.
“If the services which underpin people’s daily lives are to survive the next few years then it will be essential that this and the next government commit to a much faster and bolder approach to English devolution… For some areas it’s now devolution or bust.”
Mr Hopkins said the cuts announced in today’s local government finance settlement were “lower than last year and one of the lowest levels of reduction under this government”.