Local government finance directors have calculated council spending power will fall by 6% following the finance settlement – more than three times the 1.8% the government has claimed.
The Chartered Institute of Public Finance and Accountancy (CIPFA) suggests the government figures include ring-fenced budgets and cash shared with the health service – money which is largely outside council control.
Overall the settlement funding to local government will be cut by 14.6% in 2015/16, the accountancy body claimed. The figures also vary across the country. With funding cuts falling more heavily in areas of greatest need.
Spending power in London is set to fall by 8%, and 7.8% in the North East, while councils in the south east will see their spending power drop by just 3.4%.
CIPFA chief executive, Rob Whiteman, said the stark difference in figures ‘demonstrates why we urgently need transparency’ on funding.
‘While closer co-operation between local authorities and the NHS is fundamental to better outcomes in social care, to portray money already spent through pooled budgets as extra funding is seriously distorting, not least because the same money appears to be counted as NHS funding as well.
The figures presented by the Government also appear to hide the true impact of cuts upon some local authorities. Once you peer behind the opaque measurement of funding used today, you see that the disparity of impact across the country and between different types of authority is significant and needs to be considered carefully by policymakers.
He reiterated CIPFA’s calls for an independent body to release funding to local authorities.
The Local Government Association (LGA) has said the settlement represents 8.8% less funding for local government.
LGA chair, Cllr David Sparks, said: ‘Councils have spent the past four years finding billions of pounds worth of savings, while working hard to protect the services upon which people rely.
‘But those same efficiency savings cannot be made again. The savings of more than £2.5bn councils need to find before April will be the most difficult yet. We cannot pretend that this will not have an impact on local government’s ability to improve people’s quality of life and support local businesses.
‘We need a better way of funding public services which shares public money more fairly and gives people a greater say over how it is spent in their local area.’
On the government’s decision to keep the council tax referendum threshold at 2%, Cllr Sparks added: ‘The government has at least acknowledged councils’ warnings about the significant additional strain this would have placed on services.
‘However, it should not be the place of Whitehall to interfere in discussions between councils and their residents about how local services are paid for.’
Find out why after the finance settlement councils are still in the dark on cuts.
