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LGC survey: Increase in optimism on savings targets

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There is increased confidence among council chief executives and senior officers about meeting savings targets in both the short and medium term.

Despite uncertainty surrounding the future of public sector finances, LGC’s latest Confidence Survey found three-quarters (75%) of the 206 respondents were confident they would meet their savings targets this year – up 10 percentage points from when we last asked the question in January.

Confidence varied significantly depending on the type of council, though.

Results showed 93% of respondents from districts were confident of finding the necessary savings this financial year compared to just 66% from metropolitan and 55% from unitary councils.

While all council types recorded increased confidence about in-year savings, the biggest jump was among London boroughs – from 55% confidence in January to 85% now.

Confidence dipped when respondents were asked about meeting their fiscal targets up to 2020, with just 38% believing they could find the required savings by that time. However, that was still a notable increase on the 29% who said they were confident at the start of the year. 

The biggest concern lay among senior staff working for unitary authorities with just 13% confident of finding the necessary savings, down from 17% in January. Confidence was highest among senior staff at metropolitan councils – 58% were confident, which was a massive jump from 10% nine months ago.

Services are set to be hit hard though as a net confidence rating of -58% or lower was registered for all service areas being protected from cuts. Libraries and trading standards recorded the lowest ratings of -82% and -76 respectively.

The only service areas where doubts had decreased since the January survey were housing and public health which had net confidence ratings of -61% and -59% instead of -75% and -76% respectively.

Nearly half (46%) of respondents supported the government’s timetable of introducing 100% business rate retention by 2020, while 30% believed it should be introduced sooner.

Asked which of additional grants and responsibilties they would support being devolved to local government under the reforms, public health, revenue support grant and skills won the most support out of those suggested by the Department for Communities & Local Government in its consultation.

The Greater London Authority transport grant was the least supported proposal (35%) followed by the devolution of responsibility for attendance allowance (37%).

Chair of the Local Government Association Gary Porter (Con) has said any government insistence that councils would have to finance a new responsibility for attendance allowance through full business rates retention could be “a deal breaker”.

He said using business rates to fund payments to the over-65s for help with their care would undermine the rationale for using 100% retention to boost business and stimulate economic growth.

When broken down by council type, 45% of respondents from county councils supported the attendance allowance transfer compared to 41% from unitaries, 40% from metropolitan councils, a third from London boroughs, and 24% from districts.

Proposals in the DCLG’s consultation on 100% retention of business rates, which closes today, have proved controversial.

Support for devolution of grants and responsibilities under 100% business rates retention
Proposed grant/responsibility % support
Public health grant 76%
Revenue support grant 75%
Skills 74%
Improved better care fund 66%
Rural services delivery grant 63%
Local council tax support administration subsidy and housing benefit pensioner administration subsidy 59%
Bus services operator grant 58%
Youth justice 56%
Attendance allowance 37%
GLA transport grant 35%

Counties and districts recently said planned pilots in London, Greater Manchester and the Liverpool City Region should not set a precedent which sees some cities retain a greater share of the extra funds available.

Councils overall were split on the issue, with 38% in favour and 37% against a model that saw differing responsibilities devolved in different areas, depending on their level of business rates income. Just 14% of those from unitary authorities supported the proposal.

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