Funding gap of more than £5 billion by 2024

The Local Government Association has set out the need for the Chancellor to use the Comprehensive Spending Review to provide an additional £10.1 billion per year in core funding to councils in England by 2023/24.

Council leaders say that the government’s first CSR in more than a decade must provide sustainable and certain long-term funding to councils, bring power and resources closer to people and finally begin cross-party work to provide a sustainable, long-term funding solution for adult social care services.

The LGA argues that, with the right powers, sustainable funding, and enhanced flexibilities, councils can continue to carry out vital work and ensure communities are able to prosper in the future.

Many councils were in a difficult financial position before the pandemic hit after a decade of central government funding reductions. They will continue to face spiralling demand pressures on day-to-day services - some pre-existing and others made more significant by the impact of coronavirus – amid substantial income losses, such as from local taxation, fees and charges.

The LGA has used its submission to set out the need for the Chancellor to use the CSR to provide an additional £10.1 billion per year in core funding to councils in England by 2023/24. This is made up of: a funding gap facing councils in England of £5.3 billion by 2023/24; £1.9 billion for services struggling under increased demand.

However, councils are ambitious to go beyond just managing the current challenging state of local finances and services and need to be able to play a leading role in helping communities recover and rebuild after the pandemic. The LGA’s submission sets out how a further £2.9 billion could be used by councils to help improve services and reduce inequalities. This includes investment in early intervention and prevention, reforming adult social care pay, boosting connectivity, improving parks and green spaces and more.

James Jamieson, LGA chairman, said: “The pandemic has shone a light on the highly valued services councils provide - including public health, adult social care, children’s services, homelessness support, and help for those in financial hardship.

“Councils are focused on supporting communities through this crisis and beyond as we look to rebuild our economy, get people back to work and level up inequalities. That is why the first Comprehensive Spending Review in more than a decade will shape the direction of this country for years to come.

“Securing the immediate and long-term sustainability of local services must be the top priority. The ambition of councils goes way beyond just maintaining services the way they are today. We want to create new hope in our communities. With the right funding and freedoms, councils can improve the lives of their residents, address the stark inequalities the pandemic has exposed, develop a green recovery, address skills gaps and rebuild the economy so that it benefits everyone.”