The chancellor’s Spring Budget is likely to be “short-termism sticking plaster politics”, offering little additional funding for councils and continuing to “plague” the sector, CIPFA’s CEO has warned.
Ahead of chancellor Jeremy Hunt’s Budget on Wednesday (6 March), Rob Whiteman has released a statement suggesting that the government’s spending plans for the next fiscal year are unlikely to offer local government finance any relief.
Whiteman explained: “Sadly, it seems the short-termism from the government towards councils will continue to plague local government with little extra funding expected from this year’s budget.
“Despite extreme cost pressures, CIPFA’s call for urgent finance model reform remains unanswered. In turn, councils are struggling to even stand still, let alone accommodate the increased demand and costs for services, such as special educational needs and disabilities (SEND) provision.”
Whiteman called for the government to increase SEND funding and remove the “huge” accumulated deficits in the Budget tomorrow.
In January, the government offered local government the sixth one-year settlement in a row, which critics have labelled as hampering the financial planning and sustainability of councils.
Also in the final settlement, levelling up secretary Michael Gove offered councils an additional £600m, of which £500m was earmarked for social care. Despite the additional funding being welcomed by the sector, local authority leaders stated that a comprehensive long-term solution is needed to fully address the ongoing financial pressures experienced by councils.
In addition to the funding, Gove also stated that councils would now be required to produce productivity plans “setting out how they will improve service performance and reduce wasteful expenditure”.
This year’s budget is likely sticking plaster politics with more tax cuts, arbitrary efficiency targets and fiscal instability. Long-term reform is now the only way to ensure a system that works for all – Rob Whiteman, CEO, CIPFA.
Workforce capacity
Whiteman explained that alongside financial barriers, local authorities have also faced challenges caused by a reduced workforce, which has ultimately hindered their productivity.
“The government must understand that productivity cannot be improved by councils without some heavy lifting by the government on skills, housing, pay and workforce supply.
“This year’s budget is likely sticking plaster politics with more tax cuts, arbitrary efficiency targets and fiscal instability. Long-term reform is now the only way to ensure a system that works for all,” Whiteman said.
‘Cut consultants and diversity solutions’
Whiteman’s comments come as Hunt is set to tell councils to reduce spending on consultants and diversity schemes in his Budget on Wednesday, the BBC has reported.
According to the report, the chancellor will urge councils to cut back on what he says is wasteful spending and stress the importance of productivity.
In response to this, Shaun Davies, chair of the Local Government Association, told the BBC’s Today programme that conversations about diversity schemes were a “distraction” from the real problems.
Davies also argued that in relation to consultancy spending, councils were forced to pay for consultants to bid for central government funding.
Spending on consultants and diversity schemes was also a point picked up by Gove when he announced the requirement for councils to produce productivity plans.
At the time he suggested that local authorities should “consider whether expenditure on discredited equality, diversity and inclusion programmes” meet the objective of “improving service performance and reducing wasteful expenditure”.
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