Further cuts to local government a ‘false economy’, LGA warns

The Local Government Association (LGA) has warned Chancellor George Osborne that further cuts to local government spending would represent a ‘false economy’.

The warning has been issued ahead of the Chancellor’s Budget and comes as part of a range of proposals that the LGA has submitted to Osborne to consider.

The Chancellor has suggested further cuts could be expected in the upcoming Budget to account for slower than expected economic growth, and the LGA is concerned that unprotected local government funding could once again take a significant hit.

According to the LGA, cuts to council funding in recent years have had a knock on effect in the public sector, leaving other organisations such as the NHS to ‘pick up the pieces’. As a result of this, the LGA claims that ring-fencing certain budgets doesn’t make sense, as cuts to unprotected budgets could be putting those very services at risk.

Additionally, the LGA claims that extra powers to run local services would give councils the opportunity to boost housebuilding, increase the number of school places and reduce unemployment.

Lord Porter, LGA chairman, said: "Councils have more than played their part in trying to balance the nation's books in recent years and all councils will have to continue to find substantial savings from local services to plug funding gaps over the next four years. Extra council tax powers and transitional funding will help some but won't be enough to completely offset the full impact of funding pressures.

"Giving councils the option to fix longer-term funding settlements has been an important step and rightly recognised by government as being essential to give councils the financial certainty they need to protect local services. It would be perverse to then undermine this with further cuts handed down just one month later.

"Cutting local government to prop up other departments is a false economy. The government should carefully consider the effect council funding cuts have on other parts of the public sector and whether to tear down the ring-fence around health and education spending.”