Essential local services continue to face an uncertain future after today’s Local Government Finance Policy Statement.
All district councils need a guaranteed real-terms increase in underlying funding and councils with high temporary accommodation costs need additional targeted support. The statement today fell short on both counts.
Overall the Statement provides less financial support for district councils than last year at a time when cost pressures continue to increase. The extra funding from the Extended Producer Responsibility for Packaging scheme is welcome and we expect some districts to benefit from the new Recovery Grant.
But, until we see the detail of the Finance Settlement and the shake-up of various grants, DCN is concerned that some districts with tight financial pressures will lose out.
In particular, the Statement offered no additional new money to support councils on the front line of the growing temporary accommodation crisis despite a rapidly worsening homelessness problem.
The statement also indicated a shake-up in some of the funding streams upon which many district councils depend:
- Funding from the Rural Services Delivery Grant will be “repurposed”;
- The New Homes Bonus will be reformed beyond 2025-26;
- Various growth grants will be “consolidated” into core grant funding.
Cllr Jeremy Newmark, Finance Spokesperson for the District Councils’ Network, said:
“District councils, like other types of council, continue to feel the pinch financially. Today’s finance statement contains welcome news of an increase to core spending power but inevitably falls short of guaranteeing the financial stability which will secure the long-term future of essential local services.
“District councils will be anxious to see the detail about the new Recovery Grant and Extended Producer Responsibility payments. Until they do, many will remain concerned about missing out on a real-terms funding increase next year, at a time they face higher costs and rising wages. The danger is that councils have no choice but to cut back on services which support jobs, housing, growth and wellbeing as a result.
“Many district councils face spiralling costs for providing emergency temporary accommodation. The homelessness prevention funding announced in the Budget was welcome. But they will be concerned that the Government has provided no additional support today to tackle the immediate financial pressure from temporary accommodation. This poses a real threat to financial sustainability and should be treated with the same urgency as social care.
“Rural districts will be nervous about the loss of the Rural Services Delivery Grant and will seek urgent assurances that the Government has clear plans to ensure rural poverty is not exacerbated.
“District councils are essential partners in ensuring homes are built, local economies grow and ill-health and homelessness are prevented – but the work on which so many communities depends needs to be properly funded if it is to continue.”
