Local authorities will need to “prioritise” spending to deliver core public services due to rising inflation, the chief secretary to the Treasury has warned.
Simon Clarke, speaking in a pre-recorded address to the Local Government Association’s annual conference, acknowledged that councils will be feeling “the pinch in your budgets” because of the “economic challenge” facing the UK.
He said: “Rising inflation has implications for the public finances just as it does for family budgets.”
Clarke stated that in last year’s spending review the government provided “the highest uplift in core grant funding for local authorities in over a decade”. However, he admitted that despite the boost in funding, in reality “it will be necessary to prioritise to deliver core services”.
The chief secretary claimed that the government had the tools and the resolve to deal with inflation. “We have a plan to grow the economy sustainability in the future, boosting productivity and improving living standards for millions in the years to come,” he said.
The Treasury is committed to giving new and deeper powers to more local leaders, because in turn that will boost productivity, pay and employment, and raise living standards.
Devolution and growth
In his speech, Clarke also highlighted the importance of devolution in driving economic growth across the UK.
He added: “The Treasury is committed to giving new and deeper powers to more local leaders, because in turn that will boost productivity, pay and employment, and raise living standards, particularly in the places where that is lagging.
“More money in the pockets of those who know their communities means better outcomes, and a better value for the taxpayer.”
The minister said that through devolution deals the government had already committed “£7.5bn of unringfenced gainshare investment funds over 30 years to empower local leaders to deliver those outcomes”.
Clarke said that the existing nine mayors from combined authorities have already played an “incredibly powerful role in driving the economic growth, improving public services, and giving local areas a real voice on the national stage”.
Further evolution of power is outlined in the Levelling Up White Paper. Clarke encouraged authorities to apply for devolution deals as, he suggested, they offer long-term funding arrangements and strengthens local leadership. However, the minister warned that the government “can’t wait forever” and areas need to decide within the next few years whether they would like to take part.
“It will be challenging for some local authorities; it will mean a change to the way power sits in this country. But also unlock huge opportunities to do things differently and better, and fundamentally to move power closer to local communities,” he added.
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