According to the Ministry of Housing, Communities and Local Government, local authorities suffered an £8 billion financial impact in the first six months of the Covid-19 pandemic. This came from higher spending on services provided by local authorities (including social care and housing) and loss of local authority income (due to lower tax receipts and business activity). Even before the pandemic, local authorities have been dealing with a year-on-year decrease in funding. The 2010-15 government resulted in a series of cuts to local authority budgets, and since then funding has continued to fall. Since 2015-16, settlement funding has decreased across the board, and subsequently ‘core spending power’ has fallen in real terms for all classes of authority between 2015-16 and 2019-20. The picture of a decrease in local authority budgets isn’t too dissimilar the devolved administrations. In Scotland, for instance, the local government revenue settlement fell by 4.7% from 2013 to 2020. It has been subsequently argued, that the ability of authorities to maintain financial and service sustainability over the medium-term is being tested.
The government have supported local authorities with significant amounts of extra funding throughout the pandemic. This has included an original £500 million ‘hardship fund’ for residents struggling to pay council tax bills at the start of the pandemic, and most recently a £120 million grant for the Workplace Capacity Fund for adult social care. In addition, councils have been allowed to balance their books over three years instead of one and bilateral agreements have been made with several authorities in the early months of 2021. The agreements rest on the premise that the authority can transfer money from its capital account to boost its revenue savings, whilst agreeing to external assurance reviews on its financial capability in return.
However, the financial position of local government remains a cause for concern. Many authorities will be relying on reserves to balance their 2020-21 year-end budgets. Despite continuing support into 2021-22 the outlook for next year is uncertain. Many authorities are setting budgets for 2021-22 in which they have limited confidence, and which are balanced through cuts to service budgets and the use of reserves. The Institute for Fiscal studies has issued a warning that ‘local authorities still face a £100m funding gap in the current financial year’ and the National Audit Office have also reported that 75% of authorities will continue to report a ‘funding gap’ in terms of government support and their forecasted revenue.
The symposium will aim to analyse the financial situation local authorities are facing, discuss current levels of government support, and explore strategies to help make their budgets go further.
- Discuss the impact of the Covid-19 pandemic on local authorities and their finances
- Analyse strategies to address pressing expenses while managing limited funds
- Explore why demand for local authority provisions have increased at the same time that the funding they receive has declined
- Share best practices on strategies local authorities can utilise to better manage their budgets and create a stronger financial position
- Learn about inequalities and discrepancies in the funding and financial situation of local governments
- Analyse the government’s ‘levelling up’ agenda, its implications and how to better prepare for it
- Tackling inequalities among various local authorities across the country
- Taking a closer a look at new and emerging technologies that can present long term savings and efficiency
For more information and to register, please visit: https://www.publicpolicyexchange.co.uk/event.php?eventUID=LI23%E2%80%93PPE