Mayor calls on next Prime Minister to end "unprecedented uncertainty" facing local government finances


With a new Prime Minsiter due to be confirmed next week, Mayor of Hackney Philip Glanville, has called on the successful candidate to prioritise local government funding.



With a new prime minister set to move into Number 10 next week, it is absolutely vital that this new Government acts to end the unprecedented uncertainty facing local government finances.

At a time when we are usually finalising our budget for the next year, we still do not know how much funding we will receive from central government. Brexit and the related Conservative leadership contest, have proven such a distraction that ministers simply haven’t agreed budgets, so we’re having to make assumptions on the size of funding cuts we will face and the amount we will be expected to save. 

What is clear is that however much our budget is further cut, Hackney - like other councils - is running out of options.

Since 2010, Hackney Council has lost more than 50% of the budget we get to spend on your local services. We’ve had to make more than £140 million of savings. We’ve done that through cutting management and back office costs, redesigning services, shrinking our workforce, renegotiating contracts, moving services online, and increasing the income we receive through fees, charges, commercial rents, and more recently, through increasing council tax.

That way, despite the second highest levels of central Government cuts in the country, we’ve protected frontline services; libraries, parks, street cleaning, youth services, children’s centres. But we need to find another £30 million over three years.

That £30million comes from further cuts to our grants from central government, but also from the rising costs we face; ever increasing homelessness, the costs of care for vulnerable adults, and support for children with special needs are rising each year, yet in all of those areas, our funding is either frozen or decreasing. After years of public sector pay freeze, our wage bill is rising, as well as the costs of everything we buy. It’s right that we pay our hard working staff a fair wage but that rising cost does not come with extra Government funding.

The instability and uncertainty of national government makes our position yet more challenging. £30 million is our best guess, based on what we know, but since austerity started, we have never faced such uncertainty over our future funding settlements. It’s also based on an assumption that we make a decision to increase council tax by 4% each year for three years. Without that, the level of cuts would almost double. 

So we will need to start making some difficult decisions, and it has now become unavoidable that some of those will affect frontline services.

We will need to be innovative making the Council smaller, and even more efficient, so we are launching another voluntary redundancy programme - our third since austerity began - to cut the Council paybill by a further £10 million. That’s around 250 fewer jobs. 

And we will need to look hard at the services we provide and work out where we can save money whilst minimising the impact on residents and staff. As we move forward and start to make those difficult choices, we are making a commitment to involve residents more closely in those decisions, and in helping to shape savings proposals, as we are doing at the moment with our Children’s Centre Engagement, which has already had input from over 1,000 residents. Where we need to make savings we want residents, service users, partners, and community groups, to get involved, tell us what’s important to them, and share ideas that will help us mitigate the impact of cuts, and spend our resources in the best possible way. 

Hackney’s Budget Challenge has reached a critical stage - but we’re still committed to providing first class public services, tackling inequality, and investing in Hackney. Despite ever decreasing budgets, we will spend what we have ‘in the bank’ - our capital budget - wisely, to meet the borough’s future needs, by building new genuinely affordable council homes to rent and buy, investing in our school buildings; making our streets safer; tackling air pollution; improving our council homes, estates, public buildings and facilities and making Hackney fairer, safer, and more sustainable. 

We will also be campaigning with councils across the country to stop the Fair Funding Review of local government finance — a stitch-up that removes deprivation and homelessness as key factors in grants, which would pit urban boroughs against rural areas for central government crumbs. At the same time, by delaying the Spending Review which should have marked the end of austerity, questions like whether £2.6m of Troubled Families funding - which helps us to support some of our most vulnerable families - will continue, go unanswered. 

It is irresponsible and short-sighted to target services that invest in people in the short-term to reduce their need for even costlier services later down the line. Last month I wrote a letter to the Chancellor alongside 32 London-based charities, and we will continue to work with other public sector organisations and charities to demand more money for frontline services from the new Prime Minister.

Hackney, alongside the rest of local Government, is working hard to do the best for residents with ever decreasing resources. Central Government, whoever ends up leading it, must stop focusing on its own internal battles, and start protecting the local services that really matter to people, not just here, but all over the country.
Philip Glanville, Mayor of Hackney