Council body makes final plea amid funding warning

Wigan Town Hall
Wigan Town Hall

A fresh plea for extra funds has been issued by councils amid warnings many town halls are facing a financial black hole.

Wigan Council is faced with making £45m worth of savings by 2020, bringing its total cutbacks to £160m since 2010, and is the process of reforming several departments.

The Local Government Association (LGA) said two-thirds of councils will be forced to find greater savings than expected to plug funding gaps next year, with problems set to continue.

The body representing councils across England and Wales called for new money to fund social care, claiming that many authorities would be left worse off as a result of reforms announced by ministers.

In December, Communities Secretary Sajid Javid allowed authorities to increase council tax by up to an extra three per cent to fund social care. He also announced a £240m “adult social care support grant” will be created for 2017/18 by reforms to an existing scheme designed to encourage councils to build extra properties, known as the new homes bonus (NHB).

But early analysis by the LGA suggests 57 care authorities will be worse off as a result as they will lose more in NHB payments - compared to indicative allocations published in February 2016 - than they gain in the new grant.

The LGA said councils face losing out on NHB money they had planned for in 2017/18, pushing them closer to a “financial tipping point”.

Council leader Lord Smith last year indicated Wigan would adopt the social care levy again but emphasised the funds it generated was not sufficient to plug the deficit for the service due to rising costs and demands.

The final decision for the next financial year will go before the borough’s full council in early March.

In a message to ministers before the final local government finance settlement for next year is confirmed, the LGA’s Tory chairman Lord Porter said: “No new money from central government is being provided to councils in 2017/18. In fact, more than two-thirds will actually be worse off next year.

“The Government must allow local government to use the extra business rates income it will keep to plug this growing funding gap if local services are to stand any chance of surviving the sheer scale of funding cuts and pressures facing them both now and over the next few years.

“Genuinely new government money is also now the only way to protect the services caring for our elderly and disabled people and reduce the pressures on the NHS.