Councils forced to revamp their savings plans after early sight of their individual funding allocations revealed cuts as high as 16% in 2015-16.
The indicative allocation figures, released last month by the Department for Communities & Local Government, have caused alarm within local government which had expected cuts of around 10%.
Councils suffering the deepest cuts have warned they could now be pushed towards a ‘doom’ scenario where services would have to be closed and vital growth plans ditched.
The extent of the cuts is the result of a series of ‘top slices’ taken from councils’ revenue support grant to fund central government programmes, such as the ‘Dilnot new burdens’ budget announced by the chancellor last month.
The hardest hit councils have been told their funding settlement assessment could fall by 16% in 2015-16. Only two authorities, Wokingham BC and Surrey CC, face cuts of less than 10%.
North Kesteven is among 69 councils facing a 16% cut. Deputy chief executive Alan Thomas said the authority might have to rethink its growth priorities. Its previous £1.75m saving plan will now have to be increased to £2.25m, equivalent to 15% of its £11.5m a year net budget.
Mr Thomas said the Conservative-run council might also review its existing policy of reserving New Homes Bonus payments for infrastructure spending. “I think we are going to have to take a different view of that now and use quite a bit of that New Homes Bonus to support core spending, otherwise we won’t be able to balance the books,” he said.
The authority was already reeling from the “absolutely devastating” government announcement that up to 35% of New Homes Bonus income will be handed to local enterprise partnerships from 2015-16, he added.
Districts and inner London boroughs were the hardest hit group of councils in 2015-16, facing 15% cuts on average. Outer London boroughs, metropolitan districts and unitaries face reductions of 14%; counties will see an average reduction of 13%.
David Huxtable (Con), cabinet member for resources at Somerset CC, which faces a 15% cut, said the reduction matched its most pessimistic plan and would have “a huge impact on services”.
He said: “We will have to stop doing things… We will only be looking after statutory services.”
While the early release of individual figures for 2015-16 has been welcomed, treasurers bodies are due to meet senior civil servants to discuss missing details in the coming months.
Brian Roberts, former president of the Society of County Treasurers and Leicestershire CC director of corporate resources, said: “Having these before the summer recess is very helpful. But there is still a lot of uncertainty.”