Ministers slammed as funding crisis in local councils laid bare

Posted On: 
8th March 2018

Labour has piled into the Government after the official spending watchdog laid bare the cash crisis facing local councils.

Shadow Communities Secretary Andrew Gwynne said: “From bin collections to libraries, local services are suffering death by a thousand cuts."
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The National Audit Office said the financial health of councils across England was getting worse and quick fixes like council tax hikes and emergency cash injections were not helping.

Local authorities have suffered central government funding cuts of almost 50% since the formation of the coalition government in 2010.

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The Government has allowed council tax increases for social care and ploughed a £2bn cash injection into the system - but the sector has still seen a real-terms reduction of 3% between 2016/17 and 2016/17, the NAO said.

The watchdog warned that one in ten authorities could run out of savings in three years if they keep being forced to plough reserves into the struggling social care sector.

And it said councils could be forced to cut so many services in the face of spending restrictions that they end up offering few services apart from social care - which faces ever-growing demand.

Labour said the NAO had laid bare the “damage the Government is doing to our public services and the need for radical rethink of the way we fund local government”.

Shadow Communities Secretary Andrew Gwynne said: “From bin collections to libraries, local services are suffering death by a thousand cuts...

“Working people and ordinary families are paying the price of councils being forced to cut back and close essential services.”

Labour chair of the Public Accounts Committee Meg Hillier said: “Councils need to know what their long-term future is, but instead of sorting this out, Whitehall has used a series of short-term fixes to paper over the cracks.”

More than 65% of councils in England were forced to dip into their reserves to keep their social care services afloat in 2016/17, the NAO revealed.

And it said since 2010/11, 33.7% fewer households have their waste collected at least weekly, the number of bus miles subsidised by local authorities outside London has fallen by 48.4%, and the number of libraries has been reduced by 10.3%.

NAO boss Amyas Morse concluded: “Current funding for local authorities is characterised by one off and short-term fixes, many of which come with centrally driven conditions.

“This restricts the capacity of local authorities and yet the weight of responsibility to respond to increased demand and maintain services remains very much on their shoulders.

“The Government risks sleep walking into a centralised local authority financial system where the scope for local discretion is being slowly eroded."