Local Government Finance

Counties have played their part in the national austerity drive, making unprecedented efficiencies whilst transforming public services. They have shown themselves to be the most efficient part of the public sector, spending just 3% on back-office costs, ensuring the frontline is protected and services retain their high quality. However, the future looks increasingly bleak without further resource, with the 36 county authorities facing £3.2bn of funding pressures over the next two years alone.

Whilst that funding gap will be met – it will be filled from increased local taxation, reserves usage, and further cutbacks to vital and frontline services. In recent months, CCN has warned that a basic ‘core offer’ of services will become the norm without new resource for councils. In order to avoid significant service cutbacks, CCN is arguing for a ‘fairer future’ for counties – including extra resource for councils in the forthcoming Spending Review to offset extra demand for services due to population increases.

At the same time, counties receive lower levels of funding for key services than any other local authority type, including social care, county schools, and children’s services, despite withstanding the most acute pressures for these services. A recent report from the National Audit Office found that adults and children’s social care now accounts for 65% of county authority budgets, up from 56% in 2013/14. This is only set to get more severe over the next few years as county authorities continue to grapple with rising demand in statutory services at a time of reductions in funding

The government’s fair funding review – and current direction of travel – is welcome, but is imperative it produces a fairer deal for counties and eradicates the unfairness in the current system.

On average, counties receive £182 per head for key services; inner London authorities receive £482
Counties face collective funding pressures of 3.2bn by 2020, of which £1.8bn is due to projected demand and inflation
Just  33% of county leaders believe they will be able to set a balanced budget in  2020/21 without extra resource
During the last Parliament, counties reduced employee expenditure by 31% and currently just spend 3% of their budgets on back-office costs, prioritising funding for frontline services

CCN advocacy

  • Advocating for substantial extra resource for councils in the Spending Review; and a sustainable four-year settlement thereafter
  • Ensuring that the government’s fair funding review is finalised and in place by 2020 and that it genuinely delivers a fairer deal for underfunded county areas
  • Continue to highlight the prudence and good practice of CCN Members in responding to the unprecedented efficiency drive they have had to embark on
  • Ensure that counties get a fair deal from future Local Government Settlements, and put forward evidence-based solutions to mitigate against the difficult financial climate

CCN Spokesman for Local Government Finance

Cllr Nick Rushton, Leader of Leicestershire County Council

CCN Chairman

Cllr Paul Carter, Leader of Kent County Council