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Stephen Houghton: MHCLG must analyse the funding gap

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SIGOMA welcomes the County Councils Network’s efforts in today’s Review of Local Government Spending Need and Funding report to highlight the vast and growing funding gaps facing councils of all types.

To influence the upcoming spending review effectively, it is essential that local government speaks with one voice on this crucial issue and this report represents a valuable contribution to what is now a sector-wide campaign.

While we may not see eye to eye on everything, and note that gaps in PWC’s methodology mean there remains more work to do as a sector, we are encouraged by CCN’s efforts to produce an independent and, for the most part, balanced analysis.

The report shows that once variation in ability to raise council tax is taken into account, non-CCN unitary councils face a funding gap of £1.1bn, while metropolitan boroughs have the highest projected overall funding gap of any council type at £2.1bn by 2025.

This underlines our previous analysis which showed SIGOMA authorities faced among the deepest cuts of any council group and have been forced, as a result, to introduce some of deepest spending reductions.

The methodology used by PWC places a valuable emphasis on the levels of funding required not only to maintain current spending levels, but also to provide a more consistent level of service across the country.

With councils of all types facing considerable and varied gaps in funding and mets more so than most, their findings demonstrate that however the ‘fair’ funding review plays out, without a significant injection of additional funding for the whole sector, a common and sufficient level of services will plainly be unachievable.

This analysis should therefore be seen as a starting point, opening up a valuable debate on how much is enough for local government. But it should not be the final word.

PWC’s analysis assumes that any differences between authorities’ defined unit costs is due to different standards of service, but there are other relevant factors to consider, such as ability to pay by the service user (deprivation) and gradations of need within the service that affect costs per head.

We would expect MHCLG to engage constructively with this analysis. And, as they continue to reject figures produced by the LGA and may yet seek to brush off this latest contribution from the counties, we say it’s time for the ministry to face up to the issue and produce their own assessment of the funding gap facing local government.

Stephen Houghton (Lab), chair, Special Interest Group of Municipal Authorities and leader, Barnsley MBC


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