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UK councils face a £3 billion funding gap just to maintain existing levels of services, local authority chiefs have warned.
The Local Government Association warned that high inflation poses a real danger to the sustainability of services and called on ministers to provide extra funding.
The LGA warned that councils could be forced to make cuts or raid financial reserves to balance their books.
It said the cost of delivering services at current levels will exceed core funding by £2 billion this year and £900 million in 2024-25.
Councillor Pete Marland, chair of the LGA’s resources board, said: ‘Inflation, the national living wage, energy costs and ongoing increasing demand for services are all adding billions of extra costs onto councils just to keep services standing still.
‘Councils’ ability to mitigate these stark pressures is being continuously hampered by one-year funding settlements, one-off funding pots and uncertainty due to repeated delays to funding reforms. The government needs to come up with a long-term plan to sufficiently fund local services.
‘This must include greater funding certainty for councils through multi-year settlements and more clarity on financial reform so they can plan effectively, balance competing pressures across different service areas and maximise the impact of their spending.’
The LGA is holding its annual conference in Bournemouth, with Levelling Up Secretary Michael Gove and deputy Labour leader Angela Rayner addressing town hall chiefs.
Rayner will promise that a Labour government will ensure that community decisions are taken by ‘people with skin in the game’.
She is expected to use her speech to pledge that a Keir Starmer premiership will give local people a ‘bigger stake’ in the future of their cities, towns and neighbourhoods.
The first King’s Speech of a new Labour administration will promise legislation to devolve power away from Westminster.
Labour leader Keir has previously dubbed it his Take Back Control Bill, borrowing the Leave campaign’s Brexit referendum slogan.
Rayner’s speech comes just months after Labour became the largest party at council-level in England in May.
Labour officials briefed that the party’s plan is to deliver ‘genuine devolution’ in its first term in office, giving communities ‘control over their own destiny.’
Rayner will say: ‘We have a politics that hoards power and an economy that hoards potential. That isn’t a coincidence, it’s an inevitable consequence. It’s a toxic, mutual dependency that feeds off the other, holding our country back.
‘Well, no more. The Labour argument is simple and it’s winning. We say the decisions that create wealth in our communities: economic wealth and civic wealth; should be taken by local people with skin in the game.’
A Conservative spokesman responded: ‘This speech shows how two-faced Starmer’s Labour are they’ll say literally anything if the politics suits them.
‘One week they’re threatening to overrule local people, concreting over their precious Green Belt now suddenly they pretend to care about devolving power to local people. It’s nothing but political opportunism.’
By David Hughes and Patrick Daly, PA
Press Association: News
source: PA
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