How does the budget affect local Councils
How does the budget affect local Councils

The Local Government Association has analysed the 2021 budget and concludes that:

  • ·       Councils are still being hugely underfunded compared to 2010
  • ·       The Budget did not deliver enough money for councils to maintain services even at current levels
  • ·       The squeeze on Council Tax payers has not stopped…

Since 2010 government funding for councils has reduced by over £16bn, and cuts have hit the councils with the poorest populations hardest.

New grant funding of £4.8bn over three years for local government is better than we have come to expect in recent years, but doesn’t come anywhere near to returning funding to 2010 levels, (even ignoring the effects of inflation over that period).

Whilst the new grant funding of £1.6bn a year is welcome after a decade of year on year cuts, it is not enough to maintain council services even at current levels over the next three years.

The LGA has calculated councils need £6.7bn in 2022/23 to maintain current services at current levels and deal with acute pressures in children social care, homelessness, SEND, public health etc (see table at end for breakdown).

The extra government funding of £1.6bn, plus the expectation that councils will put council tax up by a maximum of 3%, increases total council spending power by just £3.3bn in 2022/23 – less than half of what is needed.

The Office of Budget Responsibility says that the government is expecting to squeeze a further £5.3bn from the pockets of council taxpayers. Hidden in the small print of the Budget documents, the Chancellor is requiring councils to make council tax rises of 9% over the next three years (2% council tax, 1% adult social care precept) which will see the average council tax bill hit £2074 by 2024/25, up from £1898 today. That means the average family will pay an extra £348 in council tax over the next three years.


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