Councils on the Verge of Becoming ‘Care Authorities’

The future of local councils in the UK is at a critical juncture, with the County Councils Network issuing a stark warning to the government about the potential consequences of inaction. If urgent measures are not taken, councils risk being reduced to mere care services by the end of this decade.

As the Budget and Spending Review loom, Chancellor Rachel Reeves has been urged to address the substantial £54 billion shortfall that councils are facing. This funding gap has primarily been driven by increased demand for three key service areas:

1.

Adult social care

2.

Children’s services

3.

Home-to-school transport

An in-depth analysis by the CCN indicates that implementing 3% annual council tax increases could potentially reduce the deficit to £38 billion over the next five years. However, it is emphasised that the government cannot solely rely on this solution.

Due to the legal obligation to deliver essential services, councils have been forced to allocate their funding towards mandatory areas, resulting in cuts to more discretionary services such as libraries, buses, and road maintenance. Should the trend of insufficient funding continue, councils may be left with no choice but to focus solely on providing statutory care services.

The CCN’s latest findings, presented in the Spending Review Submission and the report titled “The Outlook for Council Finances this Parliament,” highlight several key points:

1.

Councils are projected to face a rise in additional costs amounting to £26 billion between 2022 and 2030, driven by factors like increasing demand, inflation, and ongoing market failures.

2.

In the absence of additional financial support from the government, councils could confront a cumulative funding gap of £54 billion over a five-year period.

3.

While 3% annual council tax increases could mitigate some of the shortfall, the government should not rely on tax hikes beyond this threshold to bridge the remaining gap.

4.

Significant reform to services during this parliament could contribute to further reducing the funding shortfall.

Cllr Barry Lewis, the Finance Spokesperson and Vice-Chair of the County Councils Network, expressed grave concerns about the financial predicament faced by local authorities. He emphasised the essential role councils play in delivering a wide range of services that are crucial to local residents and businesses, beyond just care services.

However, the daunting financial challenges outlined in the analysis necessitate immediate action to prevent the depletion of essential services. With mounting pressures in areas like adult social care, children’s services, and SEND transport, councils are compelled to allocate more resources to sustain these critical services, risking the potential erosion of other vital functions.

Cllr Barry Lewis underscored the urgency of providing substantial financial support to bolster services in the short term, followed by comprehensive reforms to address underlying cost drivers and demand issues. Failure to act swiftly could imperil the broader purpose of local government and undermine the government’s objectives of public-service reform and enhanced devolution to councils.

Image credit: iStock