LGA: few savings left for councils

Chancellor George Osborne announced yesterday (July 21) that he has instructed government departments to look at the potential for savings of both 25% and 40% over the next four years – with budgets to be finalised in November (see letsrecycle.com story).

Among those seeking to find savings are the Department for Environment, Food and Rural Affairs (Defra) and the Department for Communities and Local Government (DCLG) which allocates grant funding to local authorities to pay for services alongside money raised through council tax.

Spending reductions are nothing new to local authorities who have had to live with a shrinking level of funding from government since 2010, as it seeks to eliminate the UK’s budget deficit.

However, questions have been raised over where further potential cuts could fall, and the impact this is likely to have on efforts to increase recycling rates beyond the legally required level of 50% by 2020.

Commenting on yesterday’s statement by the Chancellor, councillor Gary Porter, chairman of the Local Government Association (LGA), said: “Councils have already made £20 billion in savings since 2010 following reductions in government funding of 40% and have worked hard to shield residents from the impact.

“A 25% real terms reduction to the local government finance settlement would mean a decrease of £4 billion by 2020 while a 40% reduction would mean this rises to £7 billion.

Services

Councillor Porter also suggested that vital services – including waste collections – could struggle to cope if the axe falls further on local authority budgets.

He added: “For many councils, there are few efficiencies left to be made and these alone will not be enough to cope with further funding reductions. Vital services, such as caring for the elderly, protecting children, collecting bins and filling potholes, will struggle to continue at current levels.

“If our public services are to survive the next few years, we urgently need a radical shift in how public money is raised and spent, combined with proper devolution of decision-making over transport, housing, skills and social care to local areas.

“Fairer funding for local services, and the freedom to pay for them, will allow councils to tackle the big issues facing their residents and protect services which bind our communities together and protect our most vulnerable.”

Andrew Bird, chair of the Local Authority Advisory Committee (LARAC) also noted that few council officers will be surprised by the Chancellor’s ambition to slash budgets further, but suggested that there will still be ‘some pain to stomach’ for authorities seeking to cope with shrinking budgets.

He said: “This will not really be news for local authorities, we have been anticipating that level of cuts for the last few years and most authorities are now aware of it. The reality is that it will impact quite severely on services.

“There is not a blanket yes or no answer as to where savings can still be made. There are a number of authorities that are very badly off so it is very dependent on local circumstances. Bigger unitaries that have health, social care and education will find it harder I think. Other districts that don’t have those services will have some considerable pain to stomach.”