MPs’ Briefing (from non-political Local Government Association County Council Network)
Critical funding gap for rural areas
Counties are willing to play their part in reducing the national deficit, seeking efficiencies and further savings. Counties have already proven during the last Parliament that they could meet the challenge of funding reductions at a time of rising demand: making significant efficiencies, sharing services and increasing commercialism, while balancing budgets and continuing to safeguard key services.
CCN member councils expected a very challenging financial settlement. However, county councils across the country are extremely concerned that the provisional four year finance settlement unfairly moves money away from rural areas towards urban areas, and in doing so creates a critical funding gap for counties over the next two years. This is particularly prominent given the larger and increasing social care pressures being faced by county councils, which cannot be fully accounted for through the new ‘social care precept’ or council reserves.
Given the lack of consultation on distribution of Government Grant or forewarning on changes to Council Tax policy, the Government should postpone the introduction of planned changes. If however Government decide this is not achievable then counties across England are calling for some sensible and practical transitional measures for counties and rural areas over the next two years to protect our residents and businesses.
Below are some key messages from the CCN’s response to the provisional settlement which may be of particular interest to you:
- This Local Government Finance Settlement further widens the gap between what rural and urban areas receive. Funding allocations do not properly take account of need and provide less per head to residents living in counties, even though county areas have higher social care and sparsity pressures than other parts of the country.
- Next year CCN member councils see a 34% reduction in grants compared to a national average of 28%.
- Changes that favour London and Metropolitan areas result in £184m of additional funding reductions for counties in 2016/17, with total reductions now totalling £854m, with much of the additional reductions redistributed away from county communities.
- Counties already receive 37% less per head funding than urban areas. Under the proposals this gap will grow to 90% by 2019/20.
- By 2019/20, county residents will receive just £6.85 per head of resident in government funding compared to £66.82 metropolitan areas.
- Counties deliver the vital strategic services in your area, these services are the ones which your constituents care most about and which are at imminent risk. These include social care for elderly people and children, other services to protect the most vulnerable and isolated, children’s centres, roads, bus services, pothole repair, street lighting, libraries, museums and looking after our heritage.
A reduction in preventative social care services will also impact the ability of county councils to support the NHS in reducing bed blocking and meeting efficiency targets.
- The situation for counties is critical for the next two years – county councils now face an additional £184m funding gap for 2016/17 on top of their worst case scenario planning. This gap cannot be fully closed by using council reserves, most of which are committed to very specific purposes for example schools. Unless there is some mitigation put in place for counties for the next two years we could lose vital services which we will never recover.
The CCN’s full response to the provisional settlement is attached. This highlights the stark realities faced by counties in relation to other areas, the imminent challenges, and a number of practical and constructive solutions to address the critical gap in funding for our members, particularly over the next two years.
The settlement will be debated in the House of Commons any time within the next month and we call on your support in securing practical amendments to the settlement in the coming days.
Simon Edwards | Director | CCN
YOUR COUNTY NEEDS YOU IN THE COMING DEBATE GUY AND ANNE MARIE –
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