Stockton's Infinity Bridge

Councils make case for funding reforms in next Spending Review

04 September 2015

North East local government has welcomed a commitment by the Government as part of the forthcoming Spending Review to ‘transforming the approach to local government financing and further decentralising power’ and believes this is an important opportunity to bring forward measures that would enable councils to continue to grow their economies and provide high quality local services.

Local authorities believe that if they are to meet the challenges and opportunities ahead, sustainable solutions and approaches are needed that will address the weaknesses in the current local government finance system. Local government has already managed and delivered savings targets, following significant cuts in funding since 2010, with a 40% reduction in funding during the five years of the last Parliament. Reductions on this scale have created huge financial challenges for councils right across the country – with the sector having made £20 billion worth of savings overall.

Furthermore, evidence shows that the 40% central Government grant reduction has disproportionately hit the areas with the highest need, such as the North East, the hardest. This level of cuts has dramatic and damaging consequences for councils’ ability to fund statutory services such as adult and children’s social care, which face increasing cost pressures. ANEC highlights the measures councils are already taking to manage demand and deal with increasing post pressures, alongside a commitment to delivering economic growth in their areas.

Commenting on the Spending Review consultation, Cllr Paul Watson, Chair of ANEC said, “If councils are to continue to deliver economic growth and provide an acceptable level of public services across the country, reforms that deliver a finance system that is fair, transparent and sustainable are essential. Devolution of powers, resources, freedoms and flexibilities to enable areas such as the North East to maximise economic opportunities must be accompanied by adequate resources to local government”.

All twelve North East councils believe there are alternative approaches the Government can take in the Spending Review that would make a significant difference, which are outlined in a collective response to Treasury, DCLG and other key Government Departments, with an open offer of engagement and discussion with Ministers and Civil Servants over the coming weeks.

To read ANEC’s submission to the Spending Review click here.