Risk that basic ‘core offer’ of local services could be become the norm without additional resources, counties warn

England’s largest authorities are warning that plans to strip back services and offer only a basic ‘core offer’ of services to local residents could be become the norm, with these councils facing a funding shortfall of £3.2bn over the next two years.

The news comes as Councillors in Northamptonshire meet (Thursday) to sign off plans to reduce services to the statutory minimum in an effort to save £70m this year, and news that East Sussex County Council is planning to implement a ‘core offer’ unless the Government provides additional financial resources.

Responding to the developments, the network, which represents 36 county authorities covering 47% of the English population, argue that a combination of funding reductions, rising demand for services and ‘unfair funding’ means county authorities are most at risk of following East Sussex in ending all but essential local services to avoid being unable to set a balanced budget in future years.

While accepting that Northamptonshire had “not managed austerity well” and there was clear evidence of failure, other high performing authorities such as East Sussex wouldn’t be the last to set out a Core offer without additional help.

They are calling on the Treasury to “better understand the pressures we are under” and support local government with short-term resources for the next financial year, ahead of a longer-term deal in the Spending Review.

New figures produced by the network recently showed their councils face funding pressures amounting to £3.2bn over the next two years alone, £1.8bn of which is due to projected demand and future inflationary pressures.

A separate questionnaire of council leaders showed that unless Government provides additional funding there are rising concerns they will not be able to deliver balanced budgets in the coming years. With no detail on the long-term funding plans for councils beyond 2020/21 just one third (33%) were confident they will be able to deliver a balanced budget that year without an extra cash injection. In total 66% are ‘not confident’ or ‘neutral’.

County councils also say that ‘unfair’ funding means that they are least able to avoid stripping back services to the legal minimum. Shire counties receive £182 per head from core government grants for local services, while councils in London receive £481 per head.

Cllr Paul Carter, CCN Chairman & Leader of Kent County Council;

“County authorities have delivered extraordinary savings over the past eight years of austerity, helping to restore the public finances of this country. Northamptonshire has not managed austerity well and there is evidence of poor management and decision making. However, this shouldn’t detract from the significant challenges facing all counties.

“Shire Counties face a triple whammy of funding reductions, rising demand for services and are the lowest funded type of authority.

“Costs outside of our control and demand for services, such growing elderly populations, mean our councils face funding pressures of £3.2bn over the next two years. This is compounded by the fact our councils receive 62% less funding per head compared to London. Counties are shouldering a disproportionate burden and the elastic is close to breaking.

“We will work hard to deliver the savings required this year, but the scope for making deliverable savings has dramatically reduced and decisions for next year will be truly unpalatable if we are to fulfil our statutory duties. High performing authorities such as East Sussex won’t be the last to set out a ‘Core offer’, providing little more than statutory services, without additional help.

“It is clear that unless Government finds a long-term solution to council funding and a fairer distribution of resources between authorities, other well managed county councils could find themselves unable to balance the books. Only a third of county leaders are confident they will be able to set a balanced budget in 2020/21 without additional resources being announced in the Spending Review.

“The new Secretary of State for Local Government recognises the situation we face, but the Treasury need to better understand the pressures we are under and support counties with short-term resources for the next financial year, ahead of a longer-term deal in the Spending Review.”

Notes to editor:

• CCN is the national voice for England’s county councils. It represents all 27 county councils and 9 county unitary authorities. Collectively, they represent 26 million people, or 47% of the country’s population and cover 86% of England’s landmass. It is a special interest group of the Local Government Association. For more information, visit www.countycouncilsnetwork.org.uk.

• A budget analysis published by CCN on 27^th June 2018 of England’s county authorities revealed that those 36 councils face funding pressures amounting to £3.2bn over the next two years alone, £1.8bn of which is due to projected demand and future inflationary pressures. For more details click here https://www.countycouncilsnetwork.org.uk/englands-largest-councils-issue-budget-warning-and-call-for-pre-spending-review-cash-injection/

• A survey of council leaders also release on 27^th June 2018 showed that with no detail on the long-term funding plans for councils beyond 2020/21, confidence dropped dramatically in their ability to deliver balanced budgets – with just one third (33%) confident they will be able to deliver a balanced budget that year without an extra cash injection. In total 66% are ‘not confident’ or ‘neutral’. See the full summary here https://www.countycouncilsnetwork.org.uk/englands-largest-councils-issue-budget-warning-and-call-for-pre-spending-review-cash-injection/

• The table below provides a summary of reductions to ‘Settlement funding assessment’ – this is the main source of government grants (revenue support grant and retained business rates). It doesn’t include council tax.

• Counties will see their core grant funding reduced the most of any upper-tier class of authority, with a 43% reduction in SFA between 2015/16 and 2019/20. As outlined in the table below, county areas will also see their per head allocations falling at faster pace than other parts of the country.

• The table shows that county areas are by far the lowest funded local authority type; receiving 62% less than London Boroughs.