All eyes on the Budget

Posted on October 18, 2024

As we approach the Budget, local government waits in anticipation. It has felt like for much of the past year, the sector has been in waiting. Waiting for a General Election, then a new government, and now the first major fiscal event of this Parliament.

In a recent survey of our membership, almost 90% shared that the timing of the General Election, spending review and settlement had caused uncertainty in their budget.

Local government is no stranger to uncertainty. Year after year of single year settlements, last minute decisions and delays to planned funding reforms have left councils budgeting with a blindfold on.

However, this is not sustainable or an effective use of public resources. It is hoped that the Budget may finally mark the beginning of some certainty for local government.

For instance, the UK Shared Prosperity Fund faces an uncertain future beyond its current March 2025 cliff edge. It has been used by local authorities to boost employment, support communities and reduce regional inequalities. Clarity from the Chancellor on the future of the fund at the Budget will be welcome. Ideally this will be extended for the long term, providing a real replacement for EU funding and continuing to support local growth.

Various levelling up funds face an uncertain future too. Whilst the funds were far from perfect, they did provide councils with much needed capital funding to deliver local projects. The sector will be watching the Budget closely for clarity on the future of these funds.

And maybe most importantly, local government needs to know what we might be able to expect from the upcoming local government finance settlement. I was proud to sign a letter to the Chancellor earlier this month, alongside the LGA and other sector body leads, calling for measures to support and stabilise the sector's finances.

The financial landscape for councils is precarious. Clarity and certainty are desperately needed for councils to plan their budgets accurately. Key questions remain around the quantum of funding, plans for the statutory override for the Dedicated Schools Grant and the future of local government grants. The more information the Chancellor can provide alongside the Budget, the better.

With certainty, local government might finally be able to take off the budgeting blindfold and get on delivering the vital frontline services that our communities rely on. Certainty is the first step in putting local government back on a sustainable financial footing.

Cllr Sir Stephen Houghton is chair of the Special Interest Group of Municipal Authorities (SIGOMA)

Read the article in the MJ, here.