Things are “looking up” for local authorities, following the publication of the provisional local government finance settlement, according to local government minister Rishi Sunak.
Sunak made his comments during a debate on local government funding in Parliament, during which MPs raised concerns about cuts to central government grant funding to local authorities.
But Sunak pointed to the provisional settlement, published before Christmas, as proof that councils could now be over the worst impacts of austerity.
He said: “As we turn to the future, I believe things are looking up.
“In the settlement just published for local government for the next financial year, core spending power—the overall metric that looks at all the different income streams and grants available to local government—is forecast to increase almost 3% in cash terms.
“That represents a real-terms increase for local government and the highest year-on-year cash increase in some time. I know that is welcomed as a step in the right direction.”
Announcing the provisional settlement before Christmas, communities secretary James Brokenshire said core spending power is forecast to increase from £45.1bn in 2018-19 to £46.4bn in 2019-20, a cash-increase of 2.8%.
However, in its response to the consultation on the provisional settlement, which closed last week, the Local Government Association (LGA) called the settlement “disappointing” and said that councils would still face difficult choices on scaling back services.
It said: “The extra funding in the 2018 Budget, including an additional £650m for children and adults, and £420m for roads funding showed that the government is listening to the LGA’s call for desperately needed investment to ease some of the pressure facing local services next year.
“Councils, however, will still face an overall funding gap of over £3bn in2019/20.
“It is therefore disappointing that the government has not used the settlement to provide further desperately needed resources for councils next year.”
The association response also called for greater clarity on funding following the end of the four-year deal on local government funding in March 2020.
It said: “We recognise that transformation, can reduce costs in the longer term results but these savings take some time to deliver and there are costs in the shorter term.
“In addition, many service contracts are long term which limits the ability of councils to make immediate changes to the volume or nature of services or to reduce costs
The LGA voiced worries that the £35m allocated by HM Treasury to the Ministry of Housing Communities and Local Government to prepare for Brexit is inadequate.
It said: “Any additional responsibilities or added financial pressures for councils arising from Brexit must be fully funded.
“Brexit will ultimately be judged as a success or failure by localities: real people in real communities.
“If the government want to get this right, they need to properly resource local government to deal with the opportunities and challenges that Brexit presents.”
In its own response to the consultation on the settlement, the County Councils Network said: “While the settlement contains vital short-term support, it does not solve medium term financial pressures, nor does it provide long-term certainty.”
It also pressed for greater clarity on the post-2020 funding landscape for local government.
During this week’s Parliamentary debate, Labour MP Preet Kaur Gill called on the government to ensure that no council has its funding reduced as a result of the new business rates retention system.
She said: “I could raise any number of areas where government cuts to local government are causing immeasurable immediate and long-term damage—from homelessness to fire safety, from crime prevention to children’s services and public health.
“Reductions in any of those areas are not impact-neutral, as they influence and prohibit the capacity to prevent and support.”
