Short-term sticking plaster won’t solve long-term funding crisis, Council warns Government
Frontline Council services are being put at risk by a lack of certainty about future Government funding following a fourth successive one-year funding agreement, Hackney Council has warned the Levelling Up Secretary.
In a letter to Michael Gove MP, Mayor Philip Glanville, Deputy Mayor Cllr Anntoinette Bramble and Cabinet Member for Finance, Cllr Rob Chapman, wrote that it is “impossible to level up the country while levelling down London – especially when it comes to the funding of vital public services”.
The Government’s Local Government Finance Settlement, which allocates annual funding for councils, sets out Hackney’s funding for 2022/23, but it does not match the continued pressures of services such as social care and homelessness – or the ongoing cost of the pandemic.
Historically, councils have received multi-year funding settlements to allow them to plan services properly, but the Government’s long-delayed and controversial plans to reform local government funding – dubbed the ‘Fair Funding Review’ – have meant a series of interim agreements.
The proposed review will reset how local government grants are awarded, and analysis has suggested that the process will divert funding away from areas with high deprivation and need – such as Hackney – to other areas. It could mean huge long-term cuts to Hackney’s budget, extending austerity for a borough amongst the hardest hit, and the Council believes that local government grants should be awarded based on deprivation and need of communities, not by a one-size-fits-all formula based on population.
The Council will consider its Budget for the next year at a Full Council meeting in March. Last year, prior to extra Covid-19 funding, the Council faced a £58million Government funding gap for frontline services, following 11 years of cuts – shrinking its core grant by half since 2010.
The Government should now provide clarity on which local government funding reforms will happen and when as well as how consultation and engagement with the sector will take place. The Government must ensure that overall local government funding is sufficient when any funding distribution changes are introduced and that no council sees its funding reduced as a result. Alongside London Councils we have also consistently made the case that it is impossible to level up the country while levelling down London – especially when it comes to the funding of vital public services.
While funding reforms make it difficult for a government to set out a multi-year settlement for local government, this is the fourth one-year settlement in a row for councils which continues to hamper financial planning and their financial sustainability. Only with adequate long-term resources and certainty, can councils including Hackney plan for and deliver the first class services that our residents need and deserve.