Many people living outside the biggest cities face a visible contraction in local services after the Government today announced severe funding cuts for some councils.
The District Councils’ Network (DCN) is warning that the redistribution of money between councils, which removes the use of ‘remoteness’ as a factor in determining district council funding, fails to recognise the additional costs of delivering services in rural areas.
The measures set out in The Fair Funding Review 2.0 will also punish the councils most successful at housebuilding and at growing their local economy, despite these being Government priorities. The reforms end the bonus paid to councils when new homes are built – despite councils’ extra costs from providing infrastructure and services to new residents – and they take away the extra business rates received by councils for boosting their local economy.
The impact of the changes is likely to be felt by millions of people in the form of cuts to services including housing, waste collection, town centre regeneration and parks. Councils are also likely to scale back services which prevent illness or social problems including leisure centres and homelessness prevention, impacting on other parts of the public sector.
This is happening at a time of local government reorganisation, which will lead to upheaval and lead to financial risk for councils and services.
Cllr Jeremy Newmark, finance spokesperson for the District Councils’ Network, said:
“Instead of delivering the essential financial reform and fiscal devolution that are needed, the Government is merely reallocating an already inadequate funding pot.
“While it is of course legitimate for ministers to use areas’ deprivation as a factor in determining services, it would be ironic, unfortunate and counterproductive if this led to an increase in deprivation outside of the biggest cities.
“Money is being diverted from many rural and non-urban councils, and those doing the most to build homes and grow local economies.
“Many councils will have no option but to cut the most visible local services, impacting on wellbeing and quality of life. Because district councils deliver the day-to-day services that people see and use most, from maintaining parks, play areas and leisure centres, collecting the bins and managing town centres, residents will feel the impact.
“Councils are likely to have to scale back preventative work that leads to saving elsewhere in the public sector, including leisure centre fitness programmes that avert illness and early intervention to stop people becoming homeless.
“We are especially concerned that money is being diverted from rural councils, which already face higher costs running services over sparsely populated areas. It will also hit the councils working hardest to deliver the government’s objectives of building homes and growing local economies.
“The impact of these funding cuts comes as local government reorganisation is adding further costs and funding pressures in an already overstretched system.”
