The government has made plenty of noise about boosting public spending in the run up to Brexit. While this is clearly a positive, the devil will be in the detail around whether there is going to be new money made available or if existing funding will simply be ‘rebadged’.
There are significant problems with the current local government funding structure which, while understood by government, has not yet been dealt with effectively. If we are to implement meaningful change within the system we need to see commitment to long term, sustainable funding, similar to what has been provided to the NHS.
It’s very clear that demand led services – such as social care and homelessness - do not sit well within a funding system based on the small incremental growth of council tax and business rates. Population growth alone could increase the costs of delivering demand-led local government services by £1.6 billion over the next decade.
The challenges around schools funding and, in particular, how children with Special Educational Needs are funded, is also starting to be recognised, as the implications of the 2014 Act are now resulting in major increases in demand.
Given this is now only a one-year settlement, it is unlikely to answer any of the more serious long-term funding questions for the sector. It’s not going to resolve the fair funding issue or business rates distribution, but at this stage it’s less the split of the cake and more the size that matters, along with its growth trajectory.
Quite simply, the sector needs more funding – or be given the power to raise more income locally through taxation. We have seen too many examples of preventative services being cut to save money with councils morosely aware that, while this may result in initial cost savings, it is likely to store up more costs for the future.
A positive commitment to a local government five-year plan would be a real indication that austerity was actually over.