Local Government Finance Settlement: CCN response

Today the government published the provisional Local Government Finance Settlement for 2020/21.

Below, the County Councils Network responds.

Cllr David Williams, chairman of the County Councils Network, said:

“At the time of the Spending Round we said the new funding announced for councils was hugely significant and confirmation of individual allocations confirms that government have made real inroads into reducing the funding gap facing councils next year. The funding for social care will help councils meet rising pressures in both adults and children’s care, alongside ensuring other resources are freed up to protect frontline services and to invest in local priorities.

“CCN campaigned before the election for the government to maintain the dedicated pothole and roads maintenance fund introduced in last year’s Budget, and we therefore strongly welcome the government’s commitment to introduce a £2bn pothole fund. CCN eagerly await confirmation of the distribution of this funding. Shire counties are responsible for 70% of council-maintained roads, with county and rural roads historically not receiving the same level of support as London and City Regions. We therefore believe the funding should be distributed using the same methodology as 2018/19.

“The ability to raise council tax by 4% will help us to address growing demand for care services and meet other rising costs in the short term. We expect most counties will implement the rise ahead of next year’s Spending Review. However, looking ahead, we must recognise there are limits to which rises can meet council funding needs going forward. Above inflation increases over the next five years would still leave county authorities facing a £7.7bn funding shortfall, down from £13.2bn without rate rises. At the same time, there must be a recognition that yearly increases add to the cost of living for families, especially in county areas. Historically lower funding has led to average council tax rates in some counties that are double those in Inner London, at the same time median incomes in counties are below the national average.

“Given this, we look forward to working with government to deliver a sustainable, and crucially fairer, funding outlook for local government at next year’s Spending Review. While this settlement has made very good progress in meeting the financial challenges councils face, further resources will be required to meet the funding shortfall in the future.  Counties also want to see real progress in the new year on the next stages of the fair funding review, alongside wider reforms to local government finance.

“We are confident that that this can be achieved and we can repay this investment by pledging resource to fixing our roads and the growth-enabling services that can make the biggest difference in delivering the government’s aim to level up communities and spreading prosperity