LGA raises concern over worse off councils

The Local Government Association (LGA) has called on the government to reverse its reductions in New Homes Bonus (NHB) payments, claiming two thirds of councils will be worse off as a result of the move.

The LGA cited that the although government has brought forward council tax raising powers for social care authorities and redistributed £241 million in NHB payments through a new Adult Social Care Services Support Grant, early analysis suggests 57 social care authorities will be worse off.]

The LGA claimed that these councils will lose more in NHB payments - compared to indicative NHB allocations published in February 2016 - than they gain in Adult Social Care Support Grant.

Ahead of councils publishing their 2017/18 budgets, the LGA has called on the government to use the final Local Government Finance Settlement to: reverse the New Homes Bonus reductions in 2017/18 to avoid councils having to find significant savings due to this unexpected loss of this funding; and find genuinely new government money to pay for the £241 million Adult Social Care Support Grant. Even with this some short-term support – and the ability to raise a council tax social care precept of up to three per cent in 2017/18 – social care still faces a £2.6 billion funding gap by 2020.

It also proposed the government should commit to allow local government to use the extra business rates income it will keep by the end of the Parliament to plug the £5.8 billion funding gap it faces by 2020. This is desperately needed to avoid communities from suffering further damaging cuts to the local services they rely on.

Lord Porter, LGA Chairman, said: "No new money from central government is being provided to councils in 2017/18. In fact, more than two thirds of councils will actually be worse off next year than they were expecting.

"Councils need government to reverse New Homes Bonus cuts next year and fund the Adult Social Care Services Grant with new money. This would avoid councils from having to make deeper than expected cutbacks to local services in 2017/18 and would provide some short-term support to councils providing social care.

"None of this changes the fact that all councils face an overall £5.8 billion funding gap by 2020. If councils stopped filling in potholes, maintaining parks and open spaces, closed all children's centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they would not have saved enough money to plug this gap by the end of the decade.

"The government must allow local government to use the extra business rates income it will keep to plug this growing funding gap if local services are to stand any chance of surviving the sheer scale of funding cuts and pressures facing them both now and over the next few years.

"Genuinely new government money is also now the only way to protect the services caring for our elderly and disabled people and ensure they can enjoy dignified, healthy and independent lives, live in their own community and stay out of hospital for longer, and reduce the pressures on the NHS."