LGA statement on provisional Local Government Finance Settlement

Cllr Louise Gittins, Chair of the Local Government Association, said: 

“Extra funding for councils next year will help councils meet some - but not all - of the pressures they face in adult and children’s social care, homelessness prevention and support for children and young people with special educational needs and disabilities. Councils of all types will continue to struggle to balance the books next year with many having to increase council tax bills to bring in desperately needed funding but still being forced to make further cuts to services.

“It is good that the Government has provided details of how it will compensate councils for direct costs they will face through increases in employer national insurance contributions (ENICs). However, this falls short of the £637 million we have estimated it will cost councils next year. We have also warned that indirect ENICs cost increases, through commissioned providers, will cost councils up to an extra £1.13 billion next year. While we are pleased that councils will receive extra social care funding, which will help towards these indirect costs, we continue to worry about the impact the ENICs rise will have on the organisations that the sector relies on to deliver vital care and support, especially smaller charities and providers. As we have warned, alongside more than 100 organisations this week, this will exacerbate the already unsustainable pressures facing vital local services. 

“Different councils will have contrasting views about the Government’s use of a different method to allocate some additional funding next year. It is vital that all views are considered, and the Government ensures all councils have adequate resources next year to provide the services their communities rely on every day and can meet growing and complex cost and demand pressures.

“Councils continue to face severe cost and demand pressures and the recently launched Spending Review will be critical to the future of our local services. It is good that the Government has committed to providing councils with multi-year settlements as part of that process, but it must include significant and sustained increases in overall funding for councils. However, this alone will not address the multiple issues with the way local services are funded and councils stand ready to work with the Government on creating an improved and a more sustainable future funding system that works for all of local government.”

Ends