Soaring inflation, rising energy prices and National Living Wage (NLW) pressures are putting council services at risk, the Local Government Association (LGA) has claimed.
Responding to a report from the Institute for Fiscal Studies (IFS) examining the inflation squeeze on public services, the LGA said that local government budgets were having to be reset with potential cuts to essential services.
“Inflation is not going to come down overnight. The impact on our local services could be disastrous. This will stifle our economic recovery, entrench disadvantage, and undermine government ambitions to level up the country,” said James Jamieson, LGA chairman.
The LGA estimated that inflation, energy costs and projected increases to the NLW will add £2.4bn in extra cost pressures onto council budgets this year, rising to £3.6bn in 2024/25.
Jamieson called for “adequate long-term funding” and the “right powers” for councils.
The IFS report warned that inflation was rapidly eroding the real-terms growth rate in day-today public service funding. If the government chose not to compensate departments, it would “heighten the considerable pressures on public services” as the winter approaches.
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