Some councils are bracing for up to 11 per cent cuts to their budgets as Rachel Reeves prepares to slash local government spending.
Figures from the Office for National Statistics released on Friday showed that public sector net borrowing was £10.7 billion in February, £4.2 billion more than had been forecast by the Government’s official forecaster, the Office for Budget Responsibility (OBR), and more than some economists had been expecting.
Isabel Stockton, senior researcher for the Institute for Fiscal Studies (IFS), said the data “underscore the challenges facing the Chancellor as we head into the week of the spring statement”.
Reeves has ruled out introducing more tax rises, The i Paper understands, meaning spending on unprotected government departments – those outside of health, schools and defence – will bear the brunt of the spending restraint.
A Labour MP told The i Paper: “Local government has been hammered so much. People really feel local services disappearing and that just carrying on would be really, really difficult. So that’s a real danger point for us.”
Ministers are currently undertaking a review into the funding formula for councils, and authorities representing more rural areas believe the criteria will be heavily skewed towards levels of deprivation, meaning more money will be funnelled towards urban, Labour-run local authorities.
“We saw in the Budget that some ringfenced funding, called the Recovery Grant, was based solely on deprivation, while they cut the rural services grant. So if the rumours are true [that local government funding will be cut] we could be looking at cuts of up to 11 per cent over time.”
Services struggling
Local authorities have statutory obligations to provide for adult and child social care as well special educational needs provision, but Oliver warned that even these areas could be cut back.
This would mean reducing the number of hours of support for those in need, at a time when “people are also losing their benefits, so we would be severely impacting their quality of life,” Oliver added.
“It does feel as if rural communities are being put under considerable pressure,” Oliver said. “It feels as if there are certain sectors across the country that are potentially now being left behind, and that can’t be right. There has to be equality for all types of different communities, whether those are metropolitan, town, cities or rural areas.”
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“That’s why we’re allocating £69 billion to council budgets across England, reforming the funding system and bringing forward the first multi-year funding settlement in a decade, so we can deliver better public services and drive forward our Plan for Change.”
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