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Confidence slumps that savings targets can be met

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Senior officers’ confidence has slumped that in-year savings targets can be achieved amid concerns more councils could yet issue section 114 notices, LGC can reveal.

49% are doubtful they will meet saving targets this year

LGC survey: Confidence slumps that savings targets can be met

Of the 145 chief executives and senior managers to respond to our Confidence Survey, almost half (49%) said they were doubtful their council would achieve the necessary savings in 2018-19; 43% said they were confident of meeting their targets this year. 

In February, Northamptonshire CC became the first council in almost two decades to issue a section 114 notice. Since then concerns have been raised about the state of the finances of a number of other local authorities including Somerset, Surrey and Lancashire CCs, Birmingham City Council, and Torbay Council.

Looking further ahead, survey respondents expressed less confidence that savings required by the end of the decade could be achieved than they did last year, while 42% thought their council will issue a section 114 notice at some point within the next four years.

Hover over interactive graphic for full percentage breakdown

 

 

Among just the chief executives responding, one in 10 said their council would issue a section 114 notice within two to three years, while just over a quarter (26%) said this would happen within three to four years. No officer responding thought their council would issue a section 114 notice this year. 

One chief executive said: “The next three years are secure if we can manage the demand in adults and children’s. The challenge around government not supporting devolution and a complete lack of policy means that even with a well-run council and relatively strong local economy we are likely to start to significantly struggle in 2021/22.”

Another chief said their finances were “sound now” but added the situation was “unsustainable” due to their workforce being “knackered”.

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One senior officer warned their council’s reserves would soon be “depleted” which “will heighten the risk” of issuing a section 114 notice being issued.

Another senior officer said, based on history, their council is likely to “make the difficult decisions” to balance the budget but added: “What this means for non-statutory and universal services is hard to predict.

“There is the likelihood that care services will be scaled back to a statutory minimum if government support does not increase. Clearly not making the tough decisions would increase the chance of a s114 notice.”

This comes as questions are raised over what level of service Northamptonshire will offer in the future and the legality of the way the county is seeking to bridge its £65m budget blackhole.

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In relation to 2018-19, officers working for district councils were the most confident of delivering savings plans (70%), followed by those working for unitary councils (51%). Officers at Metropolitan councils were the least optimistic of hitting their targets, with a third saying they were confident of doing so.

A total of 90% said they were doubtful the forthcoming social care green paper would lead to a financially sustainable system, with just 1% of senior officers saying they were confident.

Most responses to the survey were received before the government announced extra funding for social care this year and the lifting of the housing revenue account borrowing cap.

Hover over interactive graphic for full percentage breakdown

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