Urgent need for local authority funding reform

IT HAS been no surprise to me which areas of the country have suffered the most from the pandemic and its aftermath.

Of the 20 areas in England with the highest rates of coronavirus, 15 are members of the network of municipal authorities which I chair.

These are areas which are more deprived than the national average and saw the biggest cuts during austerity. While all councils lost cash, our members saw a further £ 21m cut per authority above the average, resulting in cuts to preventative and most non- statutory services.

In these authorities, people’s health is worse and life expectancy is lower, in some communities by almost a decade. We have also seen that people on lower incomes, many of whom are the key workers who have kept the country going, are generally more exposed to the virus in their workplaces.

These factors combined mean that more will get coronavirus and sadly more will die from the disease. A leaked Public Health England report even found that Covid- 19 could be “endemic” in the deprived parts of England.

However, this is not inevitable. The upcoming spending review represents a crucial opportunity to properly invest in our people and places to end the cycle between deprivation, low opportunity and poor health.

Councils up and down the country will be submitting evidence for the Comprehensive Spending Review, the deadline of which is today.

One thing that will no doubt be at the forefront is the massive financial pressure Covid has placed on authorities, already under severe pressure following a decade of cuts. For our 47 municipal authorities these pressures, not even including council tax or business rates losses, will top £ 2.2 billion.

With just £ 1.2 billion of funding to date and an unresolved income pressures fund, this alone could leave a deficit of over £ 0.5 billion, resulting in inevitable cuts, or even to a council going under.

Government must compensate these losses as council cuts will put the brakes on the fragile recovery and risk our fight against the virus.

The pandemic has reinforced the fact that the current system of funding our public services is not sustainable. The decade of cuts has meant that councils now rely increasingly on locally raised taxes such as business rates and growth incentives which are higher in wealthier areas.

We need a grant- based system calculated by need to ensure council services are properly and equitably funded, while ensuring no council loses out under a transition. Decoupling business rates from paying for council services would be good for businesses and councils, and we could reform the former without risking the latter.

Local lockdowns will mean businesses in these areas need the greatest support to get back on their feet, but those same areas will also require funding for vital public services to combat the virus. The current system creates a zero- sum game between these two needs and must be reformed.

To get the country back on its feet following the current economic slowdown, the Government needs to significantly invest in infrastructure. We need decisions on investment to include considerations of transforming our regions rather than skewing money to areas where wealth is concentrated like London and the South- East.

The Government must double down on its commitment to reform the Treasury “Green Book” to ensure towns and cities across the country can benefit from transformational infrastructure and have more say

The current system of funding our public services is not sustainable.

in how this money is spent. A fair and equitable successor to the EU Regional Development Fund must be announced quickly, further delay will risk existing projects dependent on this funding.

On the steps of Downing Street last July, the Prime Minister announced that he would “fix the crisis in social care once and for all”.

This statement came following several years of waiting for a social care Green Paper that never came. It is now time for Boris Johnson to keep that promise.

While various governments of all stripes have dallied and obfuscated the issue, a crisis has begun to develop – for councils the LGA have estimated that there will be a £ 4 billion funding gap by 2025 for adult social care.

During the pandemic we have seen the need for highquality social care, so it is of vital importance that the Government grasp this issue and ensure that our elderly can get the social care they deserve.