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From the outside looking in on the wonderful world of local government finance

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Commentary on this week’s Local Government Association’s finance conference 

Child protection investigations have risen by 150% in the past 10 years, with reports of child sexual abuse rising 31% in the past year.

These two statistics, published by the Local Government Association and NSPCC respectively, provide a glimpse into the rising challenges top-tier authorities face every day – all while budgets are being slashed in line with government funding.

The question of how to pay for these vital services is beyond tough. After almost a decade of austerity, councils are now being confronted with choices about which vital frontline services they must switch off first.

As a new reporter at LGC, I only heard of some of these dilemmas for the first time at the LGA’s conference on local authority finance on Tuesday. What follows is my outsider perspective on the decisions and issues finance chiefs have worked through for years.

The mood

If I left with one main take-away from the conference, it is that senior council officers and politicians are refreshingly candid and wonderfully happy to speak without filter.

In less than half an hour of question time, I heard universal credit being described as a “car-crash waiting to happen” while the fair funding review was described as the “biggest disaster” in local government finance history.

My previous beat as a reporter covered Jihadist rebels in Syria – I can report cross-overs in rhetorical delivery and manner.

Spending power

One important point levelled at a senior civil servant was that finance chiefs at both an officer and political level are forced to understand “an awful lot of quite technical, complex stuff” before they make decisions. I felt for this particular councillor on numerous occasions.

The first moment was when the LGA’s head of local government finance Nicola Morton reported that shire districts will witness a 5% average decrease in core spending power year-on-year between 2016-17 and 2017-18 compared with a 3% rise for shire counties.

One goes up, one goes down but ultimately everyone loses. 

Council Tax

The housing and communities secretary’s proposal to let local authorities increase council tax by an extra 1% went down as well as the news Sajid Javid would be 10 minutes late for his keynote speech.

These quotes from three separate councillors are a fair representation of the mood of the room:

“It’s not fair for the government to pass these costs along.”

“A 1% increase on council tax means different things for different boroughs -– for some it’s very little money, for others it’s a big increase.”

“Politically, the risk of raising council tax is too great. A 3% social care precept should be adjusted to 2%. As a politician I do not agree that my constituents should pay a penny more than is necessary.”

So that’s going down well then.

Cost drivers

Population, sparsity and deprivation: three words I found underlined and in bold in my notes to a speech by Stuart Hoggan, deputy director for local government finance at the newly rebranded Ministry for Housing, Communities and Local Government, (or MuhClug / M-Ho-Co-Lo-Go for short).

These three issues are the main causes for rising expenses in delivering services and Mr Hoggan said a national consultation on how to weight them would close in 2020 -– with technical papers beginning in spring/summer this year.

The sector will no doubt take a keen interest in this piece of work.

The big issue

The various challenges facing local authorities are well-known.

The thinktank Demos found this week that most people had a “clear understanding of the social care crisis and the impact this is having on the core health service”, in an extensive series of focus groups across England.

Even though most respondents could only name three national politicians who aren’t the prime minister or Jeremy Corbyn, there was a clear consensus that a lack of government funding was the main problem. Indeed, most participants felt there was a need for a “greater ‘public service’ culture in health and education spending”.

Councils have witnessed an almost 50% decrease in their spending power over the past five years and the pinch is definitely being felt across the country – one only has to look at the situation in Northamptonshire CC to see the situation becoming precarious.

This “pinch” – leading to greater stress for all council staff – was repeatedly passed on to central government civil servants and ministers on Tuesday. 

One can only hope they took note.

By Robert Cusack, reporter

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