Councils doubt ability to set a balanced budget next year

A new survey has revealed that just one in five of England’s largest councils are confident of setting a balanced budget next year without dramatic reductions to frontline services.

The County Councils Network says that their survey highlights how a failure to provide more funding for councils at this month’s Spending Review will result in local authorities implementing ‘visible and damaging changes’ to frontline services next year to balance their budgets, and could hamper their efforts to continue to tackle the spread of coronavirus.

The survey comes as the network predicts a £1.7 billion funding shortfall next year for their 36 councils, which is likely to be exacerbated by the second lockdown.

The research shows that over the next two years only 22 per cent of councils are ‘confident’ they can deliver a balanced budget next year without ‘dramatic’ reductions to services. Confidence drops further in 2022/23, with just one local authority confident of setting a balanced budget that year.

Additionally, just one council said they would be able to invest in adult social care over the next two years if extra funding was not made available, with more than half stating that they were planning to reduce access to care packages and/or introduce new charges for services ‘moderately or severely’, with 42 per cent implementing the same severity of reductions to personal budgets and mental health services. As a result, 46 per cent said it would mean less people would be able to access council-arranged care packages and 65 per cent said it will lead to more demand on the NHS.

The CCN also highlights how there is less scope to reduce services in children’s social services, with all councils seeing a rise in vulnerable children. However, 27 per cent of councils said they will have to implement moderate or severe reductions to services for children in council care and subject to safeguarding, and a third of authorities are planning the same severity of reductions to early years and youth services.

Roughly a third of councils say that they have no scope for savings in libraries, bus subsidies, and school transport because these services have already been reduced to minimum levels. However, for those that have not, 33 per cent plan moderate or severe cuts to libraries and 24 per cent say the same severity of reductions is planned for bus route subsidies. A similar number say that they will plan ‘moderate or severe reductions’ to road repairs and pothole filling.

David Williams, chairman of the County Councils Network, said: “Over the past decade, councils have done all they can to protect frontline services, transforming their organisations so they are more efficient. But as this survey shows, we are quickly running out of ways to meet the funding shortfall without dramatic reductions which will make visible and damaging changes to highly-valued services.

“The financial support provided by government over the past year has been very welcome. But even before the onslaught of a second wave, councils were facing difficult choices and they are now left with little room to manoeuvre over the coming months as they face further escalating costs resulting in an immediate cliff-edge next year.

“Councils have pulled out all the stops throughout this pandemic to protect residents, maintain vital services and support the economic recovery. To ensure that they can continue to do whatever it takes over the winter to combat coronavirus and to prevent severe reductions to services next year, they need a significant increase in funding for 2021/22, alongside an income guarantee to protect against losses in council tax.”