Brave reforms needed to stop local services reaching ‘breaking point’ – councils

Cross-party leaders of councils serving half the population of England say services can only be secured with ‘bold’ action from the next government.

Councils are facing funding pressures
Councils are facing funding pressures (Dominic Lipinski/PA)

The next government must urgently provide long-term funding for councils alongside wholesale reforms to prevent local services reaching “breaking point”, a cross-party group of the largest authorities has said.

In a stark warning to whichever party is in power after the General Election, the County Councils Network (CCN) said they will face “extremely precarious” council finances, with even well-run authorities exposed to potential failure.

CCN, which represents the largest councils in England serving about half the population, cautioned that additional funding alone will not secure future sustainability for local government.

The group called on the next government to set out a “bold and brave” package of reform to local services facing the biggest funding and demand pressures.

Research suggests changes in council funding have not been evenly spread across the country
Research suggests changes in council funding have not been evenly spread across the country (PA Graphics/Press Association Images)

The 37 county authorities said they are collectively facing a £2 billion funding “black hole” over the next two years, with 68% of the average individual budget currently consumed by adult social care and children’s services.

A predicted squeeze on spending on unprotected government departments after the election would heighten the already substantial risk to local services, leading to a requirement for an “honest discussion” with government and consideration of what services can reasonably be delivered above the statutory minimum.

In a cross-party statement, leaders of CCN councils said: “Council services in county areas enhance the lives of 26 million people, yet those councils face a funding black hole of £2bn over the next two years. Whoever wins power, the next government inherits a situation with council finances that are extremely precarious.

“Without extra funding and fundamental reform, highly valued local services could reach breaking point, and even well-run local authorities could struggle to balance the books. The next government must urgently set out how it will fund councils once in office, while also adopting our bold and brave agenda for reform.”

CCN has published a “manifesto” detailing how services should be reformed.

As well as a multi-year and “sustainable” funding settlement, it calls for price caps to be considered in the children’s residential care market to address “out of control” placement costs as well as limits on excess profiteering by dominant private operators.

CCN also said the special educational needs and disabilities (SEND) system must be “rebalanced” by making mainstream education more inclusive.

The school transport system for SEND must be also be reformed to ensure local authority costs are considered when tribunals rule on challenges to individual support packages, it added.

In addition, CCN called for economic devolution to be “extended and deepened”.

This should enable county councils to boost economic “productivity and prosperity” through “radically” boosted devolution deals which include local powers over skills, employment support, planning and greater scope for setting taxes locally, CCN said.

The joint statement added: “Our cross-party manifesto for counties does not simply make blank cheque arguments. The council services under the most pressure will only become sustainable in the future if they are coupled with root and branch reform.

“Councils want to be key partners in this process, setting out solutions and then leading on implementing reform across a host of areas, such as children’s services, SEND provision and school transport.

“With the public finances tight and non-protected government departments potentially facing a real-terms reduction, it is vital that all political parties focus on securing long-term growth.

“Our manifesto sets out how to empower county authorities through new economic powers and devolved funding streams so they can create the prosperity of the future to help fund local public services in the long term.”

Labour has committed to “deepening” devolution by establishing combined authorities which fit “functional economic areas” and “turbocharging” mayors with new powers over areas such as transport, skills, housing, planning and employment support.

The party has also pledged to “get councils back on their feet” with long-term funding and create a “new partnership between central and local government”.

The Conservative Party has been approached for comment.