We have been living through an era of chronic underfunding of public services.
The cross-party Local Government Association (LGA) calculates that councils in the period 2010/11 to 2022/23 have collectively been £24.5 billion short of what they require to fund increasing need and inflation in delivering services.
Though most councils have sought to protect adult and children’s social care, almost everything that councils do has been subject to savings pressures. After a prolonged period of paring back, the scope for further savings is very limited.
Headline inflation figures may be falling, but inflation’s legacy is baked into council costs. Need for social care continues to grow year on year. And changes in the private rented housing sector mean that more people are being made homeless, which adds to the financial pressure on councils, which have a statutory duty to help.
A recent survey of councils in England, carried out by the LGA, reckons that a quarter of local authorities are in danger of insolvency over the next two years. Several near us have already experienced this fate, notably Slough. Others are perilously close.
The new government, though committed to better funding for the public sector, has added to our challenges by increasing employers’ National Insurance contributions and wage rates, without giving us enough resources to cover those new costs.
In Wokingham’s case, historic underfunding is making a difficult situation much worse. There are 151 councils in England that provide adult and children’s social care. In terms of core government revenue funding, we are ranked 151st in the amount we are given. Amazingly, we receive only just over half the amount given to the 150th.
All this makes sound financial management of the council vitally important. A recent independent report showed Wokingham to be in the top ten of councils for service productivity, or outcomes achieved per pound spent.
We have kept our head above water, while others have gone under, partly by working more productively with external partners to maximize spending impact, but also by being prepared to take tough decisions on savings and income generation.
However tempting it is to avoid the tough decisions, there is no hiding from the serious consequences of failing to do the right thing. You may survive for a year or so, but sooner or later you will be staring insolvency in the face.
Failure to balance a council’s budget leads the government to step in, appointing commissioners to take over. The commissioners typically restore financial control by cutting services to the bone and raising council tax to double the rate allowed by the government cap.
At Wokingham, we are determined not to allow such a fate to befall our borough.
Realistically, given all the other calls on the public purse, we cannot expect much more help from the government in the coming financial year.
That means that tough decision will continue to be necessary to keep the council in a financially sound position. We will not shirk our responsibilities.
Stephen Conway is the leader of Wokingham Borough Council
