What do you do when your streets are not cleaned regularly, garbage is not collected, libraries shut their doors and social care begins to fail? These are the questions local councils across England have had to face this month, which were born out of the announcements by government Ministers in Westminster regarding a “funding freeze”. This “funding freeze” stipulated that no extra financial aid would be provided to struggling councils in the year 2017/18 after several years of economic austerity.
To understand this mounting crisis, it is first important to explain how local councils function. Typically, two tiers of local government operate across the UK, with county councils taking responsibility for county-wide issues such as social care and waste management. On a smaller scale, city or district councils take responsibility for more specific, day-to-day issues such as housing and garbage collection. These local councils have limited power to raise the funds needed to carry out the aforementioned services – only around a quarter of the funds have been raised by the councils themselves via a limited Council Tax. This means that councils are largely reliant on grants given to them by the central government in Westminster, which may be decreased at any time with the recent announcement.
This leads us to current problems surrounding council funds. Since 2010, councils have been hit hard by the austerity drive embarked on by the Conservative government in charge of grants. Between 2010 and 2015 under the Conservative/Liberal-Democrat coalition government, the financial aid obtained via the government was cut by 37%. A further 6.7% funding cut has been announced for the years 2016-2020. Currently, it does not appear that the government has any plans of reversing this trend.
If this is indeed the case, then the consequences could be grave. Although many councils have attempted to fill in the gaps in their funding by raising the rate of Council Tax, vital areas such as social care face severe shortfalls. Lord Porter, chairman of the Local Government Association, has expressed concern, stating that, “social care faces a funding gap of at least £2.6bn by 2020”. More than 40% of councils have suggested that they will have to make cuts to frontline services, which could result in the closure of libraries, reductions in public transport, and less care for the elderly at a time when Britain’s ageing population is beginning to rise to combat the lack of funds. If relief is not forthcoming, local public services face partial collapse.
Are there any solutions on offer? The government of Westminster has suggested that devolving more financial powers to councils and removing certain budgetary constraints is the way forward. However, while moves toward more local autonomy are welcome, they are unlikely to compensate for the dramatic cuts in the government grants that councils have traditionally relied on for funding. A smarter solution would be to restore grants to previous levels, alongside proposed changes relating to the devolution of power. Doing so would enable councils to tailor services to regional needs, while also ensuring that existing services are not negatively affected. To continue to cut grants heedlessly is not a plan that provides for long term stability, and will leave councils in an untenable position for the future.