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Clive Betts: Funding solutions must address today's problems

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Earlier this year, the National Audit Office confirmed that government funding for council services in England had fallen by 49% since 2010.

This month’s Cambridge University report, using data compiled from the Institute for Fiscal Studies, confirmed that the average council’s spending in England had been cut by 24% since 2010.

This is compared to a 12% cut in Wales and 11.5% in Scotland. It appears that the Scottish Parliament and the Welsh Assembly have been able to mitigate the harshest cuts. Don’t be surprised if there is a renewed call to revisit the Barnett formula, which determines public spending across the UK’s four nations.

The report also confirmed that the deepest cuts have been forced on the most deprived areas. 30 councils have had cuts exceeding 30% (seven exceeding 40%), with only one (Westminster LBC, whose net car parking income alone exceeds the government grant of most authorities) not in the areas with the most poverty and the least ability to secure income through charges and regeneration.

Meanwhile eight authorities, all relatively wealthy, have had cuts of less than 10%. When the leaders of some of those authorities have been loudly complaining about the financial challenges facing their authorities, it does make you wonder how they would have coped with the scale of the cuts in Salford or South Tyneside.

The government has already announced another £1.3bn of cuts in local government revenue resources. So what are we to make of Theresa May’s loud party conference claim that ‘austerity has ended’, whilst whispering ‘from the next spending review’?

As this is the third time she has announced it the answer is probably not much.

And how does this all square with chief secretary to the treasury Liz Truss’s claims at the same conference? “We are not making cuts to local authorities,” she said. “What we have done is given them more revenue raising power.”

When challenged about the veracity of this absurd claim, the Treasury said: “The 2018/19 local government finance settlement confirmed the third of a four-year settlement for local councils over the spending review 2015 period. This settlement ensures a 2.1% increase in cash terms in local government core spending power between 2015/16 and 2019/20 – £44.7bn in 2015/16 and £45.6bn in 2019/20.”

As all the reputable fact-checkers have confirmed, a 2.1% increase in cash terms over that period is inevitably a significant real-terms cut.

One supreme irony about the impact of the global economic collapse and the UK government’s austerity measures is that, whilst the government and private companies have been able to benefit from low interest rates, local government has effectively been stopped from doing the same in respect of its long-term high interest debt, particularly from the 1980s and 1990s.

To deter councils from, at the simplest, swapping high-interest debt for low-interest alternatives, the government forced the Public Works Loan Board to impose financial penalties which made such swaps uneconomic.

It is now estimated that councils are being forced to pay – even after the payment of penalties – close to an additional £1bn in debt interest this year alone. If the government wanted to ease the financial challenges for councils, the chancellor could do something about this in his forthcoming Budget.

Without action, we can expect to see more Sure Start Centres and libraries closing, road and park maintenance declining, and a falling capacity in trading standards and food inspections. We can’t wait another year for austerity to end.

The LGA is predicting a £3bn funding gap for children’s services by 2025. The number of children coming into care keeps increasing, with the recent care crisis review suggesting that poverty, caused by austerity policies, is a driving factor in this rise. Even Conservative MPs are warning that another Baby P situation is just around the corner.

As for adult social care, the recently-announced extra £240m is just the latest sticking plaster. And it’s a sticking plaster which doesn’t cover the immediate wound, let alone the growing sore.

The Conservative leader of North Yorkshire CC – an authority which has had only single-digit funding cuts – says that we have an existential crisis in adult social care ‘littered with green and white papers which have promised much but failed to provide the comprehensive reform that is so badly needed’.

All the background talk about social care reforms to be announced in the budget are about addressing the problems decades in to the future.

Of course, we need a long-term solution and, preferably, one that has the backing of all parties. But, we must also see an adequate response to the challenges that are facing individuals, families and councils day-in and day-out. Anything less is a disastrous failure.

Clive Betts (Lab), MP for Sheffield South East and chair of the communities and local government committee

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