The future funding outlook for councils

Posted on 18/12/2017 by Nicolay Sorensen.

The announcement of the local government financial settlement (and with it a sense of the future funding outlook for councils) in December is usually accompanied by heavy-handed seasonal puns. Will the sector enjoy an unexpected present, or is it more likely that Scrooge-like Sajid Javid will provide the equivalent of a lump of coal?

We’ll have to enjoy these puns while they last, because this is the last couple of years when they’ll be relevant. We are in the middle of the biggest shift in how the sector is funded since the introduction of council tax. In a couple of years’ time the Revenue Support Grant that the sector has long relied on to support many of its services will disappear, supposedly replaced by a localisation of business rates.

In truth, local government finance has always been and is likely to continue to be complex; the important thing is the outcome on the ground.

This outcome will be profound; it is difficult to be too hyperbolic about it. The sector has been in a state of permacrisis since 2010, and these changes (which will come to fruition in the next year or two) are a continuing and deepening of this trend.

This isn’t helped by a lack of understanding of the likely end-state position, given that an expected Local Government Finance Bill (which would have made the business rates position clearer) was abandoned in the aftermath of the General Election earlier this year.

Starting in the New Year, we will be publishing a series of blogs exploring the future funding outlook in more depth, alongside our developing series on financial scrutiny. We’ll be showcasing the views of experts to explore the implications of the crisis for various issues of importance to local people. We will also look at  what this might mean for the role of scrutiny. How can and should scrutiny councillors bring oversight to those issues?

Our plans

Amongst other things, we will look at:

• The funding crisis in adult social care;
• The challenge of children’s services;
• Pressures on universal services, like highways and waste management;
• The likely impact of Brexit;
• The effects on councils themselves – how we will have to change how we think about how we work and serve our communities.

Not all of this will be gloom. Since 2010, austerity has compelled the sector to change and transform the way it works; the sector will survive, but likely in a different form, and serving local communities in very different ways. We want to explore what this means for scrutiny and local democracy.

If there are any issues that you think we ought to explore from the point of view of the future funding outlook, or if you want to make a contribution as a guest blogger, please let us know.