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LGA Budget Submision Autumn 2017

At a time of uncertainty, councils can support the nation, their local communities and the Government in its ambitions for us to take our place in the world. Following the launch of our Growing Places report,1 the Local Government Association’s (LGA) submission to the 2017 Autumn Budget sets out how, with the right funding and powers, councils can continue to lead their local areas whilst the Government gets on with negotiating the UK’s exit from the European Union (EU). To do this, the Budget must bring forward proposals that give councils the powers and fiscal incentives they need to build their local economies, applying the principle of subsidiarity to decision making. With this approach, central and local government can together help to improve residents’ lives, reduce demand for services and save money for the taxpayer.

English councils will have had to deal with £16 billion of reductions to Government grant funding by the end of this decade. 168 councils will not receive any revenue
support grant from April 2019 and will have to contribute funding to the Government instead, fundamentally changing the relationship between local and national government. 97 per cent of councils have signed up to the four-year deal; however, economic and political circumstances have changed with the Local Government Finance Bill no longer going through Parliament and inflation higher than forecast.

In this submission we detail the unfunded cost pressures facing local government and why, with many local services facing significant funding gaps, it is vital that the Budget recognises that councils cannot continue without sufficient and sustainable resources.

Services such as children’s services, adult social care and homelessness are at a tipping point. Children’s social care in particular is becoming the biggest area of financial challenge for social care authorities. Councils are also facing additional costs such as the pay pressures related to the introduction of the National Living Wage, paying for sleeping carers and the unexpected, but essential, costs for replacing cladding systems following the Grenfell Tower tragedy.

Ensuring fair funding for local government, taking forward the further devolution of business rates and removing the significant central controls on council tax will also be important if councils are to be able to be support their residents, local businesses and the Government’s ambitions for our country. Our submission makes positive recommendations on a range of policy areas with the intention of empowering all parts of local government – combined authorities, counties, districts, London boroughs, metropolitan and unitary authorities – to deliver economic growth and high quality public services. This includes much needed reforms to ensure the distribution of funding to councils is fair and transparent.

Dealing with the housing crisis is an urgent priority for both national and local government. The country needs to build many more homes to keep up with demand. New homes must be in the right locations, genuinely affordable for local residents, of a good quality and of the right type. They must be supported by adequate infrastructure and services and delivered quickly.

The Budget is an ideal opportunity for the Government to announce key policies, such as providing a sustainable long term financial framework for councils to invest in new homes that will help us meet the needs of the nation. Alongside fiscal devolution and the devolution of powers to local areas, there is also a clear need to reform public services. Councillors and councils are leaders of their places and know their areas and their residents’ needs. As the most trusted part of the public sector, local government at its best provides strong leadership that ensures the country has safe and thriving communities.

A national, one-size-fits-all economic policy needs to be replaced by more local decisionmaking which will empower communities to make their economies resilient and growth inclusive. This is why further devolution remains vital in empowering councils to join up public service investment locally whilst continuing to provide dynamic leadership to their local areas. To help achieve the country’s aspirations to build the economy of the future, it is essential that the £8.4 billion of EU funding to local areas is replaced as part of a locally-led successor to EU regional aid. This money is vital to create jobs, support small and medium enterprises, deliver skills and boost local growth in all types of areas across the country. It is crucial that through Government policies such as the Industrial Strategy we continue to invest in all areas to ensure the nation thrives.

Taken together, our proposals provide a road map to empower councils to get on with delivering the growth, services and support that residents tell us they want, whilst also supporting central government, businesses and charities in tackling the long term structural problems that now need immediate attention. Whether it is building new homes, attracting inward investment, providing the skills our residents require or protecting the vulnerable, local government is best placed to
provide leadership and positive action in our communities across the country. Local government has a proven track record of delivering solutions. Given new funding and fiscal freedoms, we can continue to improve the quality of life of the nation. Without this new money and freedoms councils will struggle to continue to support economic growth and provide the public services residents value. A lack of funding for councils will have serious consequences in our communities.
But with the right funding and powers, local government can play a vital role in supporting central government to deliver its ambitions for everyone in our country.