The District Councils’ Network has responded to the Chancellor’s unveiling today of the spending review.
We are particularly supportive of the scale of the £39bn investment in social and affordable housing. However, overall funding for councils will fail to keep pace with rising demand for services, inevitably leading to pressure and service cuts.
We also note the commitment to end the use of asylum hotels and look forward to the Government proposing an alternative system that is both humane and is fair to everyone in the local community.
Cllr Jeremy Newmark, finance spokesperson of the District Councils’ Network, said:
“We welcome the Chancellor’s announcement of long-term investment to boost economic growth and support public services and strongly support the emphasis on capital spending.
“But it is potentially counterproductive not to consider district council services in the same light – and the overall settlement for local government shows funding will fail to keep pace with rising demand for services. This could leave crucial preventative services, which have been shown to save the Exchequer significant sums in the long term, at risk. This includes leisure centres’ work to keep people healthy and out of hospital, home adaptations for older people which reduce demand for social care and early intervention to support people at risk of homelessness so they remain in safe, secure accommodation.
“District councils’ work to get new, well-designed housing built, to regenerate town centres and to support local businesses all contributes to our national economic growth mission. However, unless it’s properly resourced, the risk is fewer new homes and jobs and less investment in our communities.
“Any real-terms reduction in district council funding creates the risk of short-term gain for long-term pain.
“The Government should place council preventative services on the same footing as other long-term investments and ensure they’re funded properly if it is not to be landed with massive bills in future.
“It is vital that the Government’s final package of reforms to the local government funding model properly funds district councils for the cost of the vital services they deliver and the severe pressures that many face from steep increases in homelessness and temporary accommodation.”
On housing, Cllr Newmark added:
“The £39bn Affordable Homes Programme is hugely positive, offering a huge opportunity to alleviate the chronic housing shortage, unfairness and the poor conditions endured by so many in our communities.
“All too often local people are being priced out of our communities or forced to live in unsafe or overcrowded temporary accommodation. We firmly believe that investment in high-quality housing offers better value than paying to try to put right the problems caused in part by bad housing – ill health, diminished communities, disrupted education and crime.
“However, the sheer scale of the housing crisis cannot be underestimated. Many councils have no option but to spend heavily on temporary accommodation – and despite today’s announcement, this situation will not ease soon.
“Alongside the terrible human cost, the crisis also has existential financial implications for councils. “Total district council spending on temporary accommodation has rocketed by 228% in just five years, from £66m in 2017-18 to £216m in 2022-23. Immediate relief is required so we can continue to assist the families and individuals in desperate need of our services and support.”
On local government reorganisation, which the spending review confirmed would take place, Cllr Newmark added:
“Local government reorganisation will not be a panacea for the financial challenge councils of all types are facing. On the contrary, new unitary councils have requested exceptional financial support of £146m from the Government over the past two years. No independent evidence exists that it will be sufficient to address the massive pressures due to rising demand on issues including homelessness, social care and children’s services. It is also incredibly hard to see savings accrue at a level that will balance increased demand for services such as homelessness and adult social care for a generation, or even longer.
“Reorganisation brings substantial upfront costs and adds further uncertainty for all local services affected. All the evidence shows that there is no relationship between the size of a unitary council and its financial sustainability. This is not a solution to the structural financial challenges.
“What could make public services far more efficient is a bolder vision for local public service reform to reduce the barriers between councils, the health service and police, and to ensure all services are more tailored to the needs of local communities. It remains far from clear that the current round of reorganisation will achieve this.”
