SIGOMA chair says councils "deserve better from the Government"

Posted on December 23, 2022

Such was the quality of expectation management from the Government that the provisional settlement in the end was generally well received.

It was not as bad as many had feared and the funding for social care, albeit coming with some conditions, will be a relief for many. The ghost of settlement-present offers some promise.

However, the bigger picture is that the problems facing local government have not gone away but instead have just been postponed. Reforms that have long been hanging over the sector have again been delayed, and while the department have made much of the ‘certainty’ provided for the next couple of years, they have not provided indicative allocations for 2024/25 so authorities are none the wiser about what funding they will have. The ghost of settlements-future does not give a clear view for individual authorities.

While the increased grant for social care is an obvious relief, it feels like funding for other vital services has been overlooked. In fact, the much-trumpeted Services Grant has been top sliced and assumptions about how much Council Tax will increase are very likely over-egged. As has been the case in recent years, adult social care budgets will be protected while other services face further savings and efficiencies.

As to whether this settlement supports the Government’s ‘levelling up’ agenda, the picture is very mixed. While it is true that more deprived authorities will see a larger increase in core spending power which is welcome, the actual difference is very small and is a drop in the ocean in terms of rectifying the fact that poorer councils have seen the biggest cuts since 2010. The ghost of settlements-past still haunt our councils.

Retained business rates growth is not included as part of core spending power and as this growth is skewed to the wealthiest areas, the true picture is likely the opposite. This pot is now worth more than £2.5bn and a reset of accumulated growth would move a considerable amount of funding to the most deprived areas. This reset was promised for 2020 but the Government have now confirmed it will not happen until 2025. This is a huge disappointment and surely goes against ‘levelling up’.

Delivering on ‘levelling up’ is about the choices that the Government make. The fact that the reset has been delayed but that they have put £136m into a ‘funding guarantee’ for councils which would see the smallest increases is revealing. This funding has gone disproportionately to the very wealthiest authorities with most of the funding going to the south and east of the country, with just 4% going to the north.

SIGOMA members might be wondering where such a ‘funding guarantee’ has been when our councils were seeing the biggest cuts in core spending power over the last 12 years.

The mixed picture is reflected in the equalisation component of the social care grant. While the increase to £160m is welcome, it still falls short of the full equalisation we had called for and means that we are at risk of a postcode lottery service developing where wealthier areas have more funding for care services despite lower overall need.

Disappointing too was news that announcements about round 2 of the Levelling Up Fund have been delayed (again). We were meant to hear about this back in October, and with delays to hearing about UK Shared Prosperity Funding it does feel like the Government is losing grip of this agenda. Hopefully when we do hear about who has won the fund has been properly targeted to the most deprived areas.

This settlement fails to provide any real Christmas cheer for councils. The settlement did not deliver financial security or the level of funding that would allow for proper investment in local services and protect local authorities from having to cut back on key frontline services and regeneration projects. A tough future awaits councils – we deserve better from the government.

Read the article in The MJ here.