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£8bn funding gap threatens discretionary services, LGA warns

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An £8 billion funding gap by 2025 will force councils to cut services such as park maintenance, fly tipping enforcement and council tax support, the Local Government Association has warned.

Between 2010 and 2020 councils will have lost almost 60p out of every pound the government has provided for services, making this year’s spending review “make or break” the LGA said.

The spending review is expected later this year, once Britain has officially left the EU but doubt surrounds how far ahead it can look. The Institute for Government warned in September that only a one year spending programme - rather than the usual three - may be possible due to the uncertainty caused by Brexit.

Councils provide more than 800 services to residents but with funding tight money is being diverted from optional services to plug funding gaps at those deemed critical or legally binding. Some like East Sussex CC are already planning to cut services back to a legal minimum “core offer”.

In a bid to influence the spending review the LGA has flagged up seven discretionary services that councils might look to scale back if the government fails to increase funding (see box).

 

Discretionary services

Rural and post-16 school bus services

Council tax support/discounts

Penalties for fly-tipping and graffiti; litter bins

Supporting businesses on food hygiene standards

School crossing patrols

Museums and galleries

Management and improvement of parks and green spaces

 Even if discretionary services are cut, the scale of the funding gaps for children’s services, adult social care and homelessness support mean it will not be enough, the LGA warned.

 While it may save money short-term cutting discretionary services was a “false economy” as they may reduce the pressure on statutory services and the NHS, the group said.

LGA chairman Lord Porter (Con) said: “The money local government has to provide vital services is running out fast and huge uncertainty remains about how councils will pay for services into the next decade and beyond.”

If realistic funding isn’t provided then local communities especially the most vulnerable will suffer, he warned.

“It will be those who rely on vital adult social care to live independent lives, rural bus routes to get out and about, council tax support to ease financial burdens and those who value clean streets, green spaces and roads fit for the purpose,” Lord Porter said. “The spending review will be make or break for vital local services and securing the financial sustainability of councils must be the top priority.”

The LGA estimates that just to stand still and deliver the same services - already significantly cut compared to a decade ago - councils need an additional £8 billion more than they are expected to have in 2024-25.

The funding gap is most acute in adult social care where it comes to £3.6 billion with children’s services close behind on £3.1 billion. For public health the figure is estimated to be £655 million.

Council cuts come on top of having to pay for higher national insurance contributions, the apprenticeship levy and national living wage, the LGA points out.

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