COUNCILS across England had to increase their council tax rates this year in order to stem a funding gap, but there needs to be a sustainable solution going forward according to a body that works with the local authorities.
The chair of the Local Government Association’s Resources Board is calling on central Government to come up with a new settlement grant with a long-term plan in order to end the pressures facing councils to provide services.
At the moment, each local authority receives a sum of money from the Government each year. Wokingham’s has been eaten away in recent years, and in the current financial year receives nothing.
The LGA’s Richard Watts said: “Faced with ongoing funding pressures such as homelessness and looking after vulnerable children, councils continue to be left with little choice but to ask residents to pay more to help them try and protect their local services.
“This will help offset some of the financial pressures they face this year, but more than a third of the extra council tax income for adult social care services will be needed to meet the cost of paying for the Government’s unforeseen increase in the National Living Wage this year.”
The wage will become £8.72 from April 1, a rise of 6.2%, and is estimated to cost councils an additional £220 million over the coming financial year.
And Mr Watts said that councils in England face an overall funding gap of almost £6.5 billion by 2025 just to cover basic inflationary and demographic pressures.
He warned: “Council tax income cannot be expected to plug the growing funding gaps they face.
“The Budget and the Spending Review need to provide a sustainable, long-term funding settlement for councils which means they can improve services and not just keep them going.”
