Following the Government’s Budget announcement, our Cabinet Member for Finance says he isn’t surprised by further Government inaction on addressing the local government funding crisis.
Cllr Richard Brown, Cabinet Member for Finance, said: “This Budget reinforces my view that the Government are completely out of touch and have no real understanding of the challenges that people and councils are facing.
“The Chancellor said he wants to increase public sector finance by 1 per cent. But with inflation at 4 per cent this means in real terms it’s a cut.
“He says local authorities need to be more “productive”, and yet his Government keep chopping and changing plans and making reckless short term financial decisions without any consideration for local authorities who are delivering key services to residents.
“I welcome the six month extension to the Household Support Fund – but, until now - we were working on the basis that this scheme was ending in a few weeks and so officers and I have been spending wasted hours looking at ways to mitigate the impact of this. We will now have to start again…not the most “productive” way to operate but we are at the mercy of chaotic last-minute government decisions.”
Cllr Brown has also described government plans to enable councils to, sell capital assets or borrow more to solve systemic national funding problems, as short sighted and irresponsible.
The Government’s Department for Levelling Up, Housing and Communities (DLUHC) has approved a one-off deviation to current accounting rules to allow 19 councils to fund day-to-day spending from capital sources, including borrowing.
Nineteen councils have been given the ok to ‘tear up’ accounting rules to raise £2.5bn of capital funding in total, to help them break even over the next few years by selling - for example buildings and land, or borrow money.
Coventry City Council is not one of these councils.
Cllr Richard Brown has been highlighting the plight of councils like Coventry since June last year, stating that government inaction was increasing the possibility of local authorities not meeting their legal responsibilities to achieve a balanced budget.
He added: “All they have proposed recently is the potential changes to accounting rules once again highlighting government failings. It’s more evidence of them washing their hands of the problem and asking councils to set up a fire sale of key publicly owned assets to generate money for short term use.
“It’s just an example of kicking the can down the road. In years to come it will leave councils with empty pockets. Towns and cities will be broke.”
“In reality, this is the equivalent to 19 councils issuing a S114 notice in one day!
“We’ve been continuing to lobby the government to say, ‘enough is enough’. The message coming from other council’s is exactly the same.
“But their answer is to leave local authorities to find solutions that will leave them a hostage to even worse financial problems in the future – this is clear from their Budget announcement today.
“The funding allocated by government is not enough for councils to deliver fair and effective services for local people.
“Here in Coventry the Council receives £31m less than the average local authority every year. We are at a disadvantage not just due to underfunding but because of unfair funding, and that means the Council, our partners and residents have to deal with the consequences of the tough decisions we’ve been forced to take to ensure Coventry has a balanced budget.”
For details of how Coventry is managing its local Budget visit our budget webpages.