This week the Government was slammed for sneakily passing the buck to councils to try to plug the massive gap in the finances needed to provide essential services and urgent need for housing.
You may have missed the largely under-reported new Local Government Settlement announced by Local Government Secretary Sajid Javid.
But you will likely feel it in your pocket.
Or worse still, if you rely on the vital services councils provide.
The new settlement leaves councils in a dangerously parlous state, while passing the buck to them to raise money, allowing local authorities to increase local council tax by up to 5.99% per year.
Council tax bills are set to rise by £100 a year, which debt charities have warned risks pushing more people already living from one pay day to the next into debt and could see more bailiffs being sent round to vulnerable households.
One in five people in the UK are in working poverty, currently earning below the real living wage, meaning council tax rises could well hit those that can least afford them.
Others point out that even these unprecedented rises of nearly 6% alone won’t plug the gaping hole in councils’ finances created by a 40% cut from central government funding since the Tories came to power in 2010.
Protecting children, caring for elderly and disabled people, collecting bins, filling potholes and many other vital services are at a tipping point already as a result of these brutal cuts from central government.
“Years of unprecedented central government funding cuts have left many councils beyond the point where council tax income can be expected to plug the growing funding gaps they face,” Lord Porter, Chairman of the Local Government Association has warned.
The Local Government Association warns that council funding is set to be further cut in half over the next two years.
Let the consequences of that sink in.
The money councils have to operate badly stretched services such as child protection, elderly care, parks and libraries is running out fast and councils face a scandalous £5.8 billion funding gap in just two years.
And even this latest buck passing to councils and the hole it will leave in many people’s pockets won’t help ease the suffering that further cutbacks will undoubtably cause.
And as councils will be expected to foot the bill of these Government-created ever-increasing funding gap, council tax rises and the cutting of services will fall disproportionately on those living in areas least able to cope with them.
Last week in a question about sprinklers being urgently needed in tower blocks after the Grenfell Tower disaster, parliament heard how the Prime Minister’s constituency has been protected from the austerity cuts that have ravaged other local authorities around the country.
“Not one penny to fit sprinklers to Birmingham’s 230 tower blocks from Government,” said Jack Dromey, MP for the Birmingham constituency of Erdington.
“Now the city suffering the biggest cuts in local government history is to suffer a further £100 million unfair funding cuts,” added the Labour MP.
“Yet Maidenhead is the constituency the least hard-hit of any in Britain.
“How can the Prime Minister begin to justify one law for her own constituency and another law for the great city of Birmingham?”
The Local Government Association warn that councils, which have already experienced unprecedented funding cuts since 2010, will see their central government funding further cut by £2.7 billion between 2018/19 and 2019/20 – a 54% reduction.
Almost half of all councils will no longer receive a penny of this government funding by 2019/20. Instead, they will actually be forced to pay extra business rates income back to the Government.
These dangerous cuts were meant to coincide with councils keeping 100% of business rates income by 2019/20. But these reforms have been forgotten and have been thrown into doubt after the Local Government Finance Bill, which was passing through parliament before the General Election, was not reintroduced in the Queen’s Speech.
This has left councils on what the Local Government Association warn is a dangerous financial “cliff-edge.”
“Rising demand and years of growing funding pressures have stretched councils to the limit,” warned Councillor Nick Forbes, the Association’s Senior Vice Chair.
“Councils knew they would struggle to cope with the pace of government funding cuts over the next few years. It was hoped that local government as a whole keeping all of its business rates income by 2020 would ease that pressure.
“With those plans now in doubt, councils are faced with the double jeopardy not only the money they have to pay for local services running out fast but also huge uncertainty about future funding after 2020.”
Unveiling the Local Government Finance Settlement, Mr Javid insisted: “While we all want to ease growing pressure on local government services, I’m sure none of us want to see hard-working taxpayers saddled with ever-higher bills.
“This settlement strikes a balance between those two aims, giving councils the ability to increase their core council tax requirement by an additional 1% without a local referendum – bringing the core principle in line with inflation.
“This change, combined with the additional flexibility on the adult social care precept that I confirmed last year, gives local authorities the independence they need to help relieve pressure on local services.”
MORE:
https://www.thelondoneconomic.com/news/politics/prime-minister-accused-one-law-constituency-parliament-hears-least-hit-austerity/13/12/
Number of children in poverty set to soar to record 5.2 million
https://www.thelondoneconomic.com/news/number-children-poverty-set-soar-record-5-2-million/02/11/
