From social care to special educational needs and homelessness, many of the most urgent public service challenges confront local rather than national government. Some of these are highly visible and obvious: rising numbers of rough sleepers, deteriorating roads, hospital waiting lists caused in part by social care shortages. Other problems are more hidden, except from those affected. Examples include the worsening crisis in residential care for children and the huge number of families in temporary accommodation.
English councils bore the brunt of some of the earliest and deepest cuts to public spending under austerity (local government functions and budgets are devolved, so the situation in Northern Ireland, Scotland and Wales is different). Between 2010-11 and 2019-20, central government funding was cut by 55% in real terms.
Budgets have since risen. The current spending review period, which runs until 2024-25, has seen an increase of 26%. But the growing need for local services means that local government finances are squeezed and stretched. In some places they are at or beyond breaking point. Last year Birmingham issued a section 114 notice signalling that it could not balance its budget and was effectively bankrupt.
Discretionary services have been hit even harder than the statutory ones, such as social care, that councils are obliged to provide. In the three years to 2019, youth services were cut by an average of 40%, with some MPs drawing links to knife crime. Parks, leisure centres and libraries have all been affected, and in some cases lost, leaving the public realm diminished and communities worse off.
No one denies that councils are under pressure. Most politicians agree that new funding arrangements for social care, in particular, are needed. Yet the election campaign is worryingly bereft of clear messages regarding local government budgets, as new analysis from the Institute for Fiscal Studies points out. Unlike in 2019, the main parties have not made commitments on future grants (which make up about 15% of council funding, with 57% coming from council tax and the rest from business rates).
They have not said whether council funding will be a priority, or whether local government could face higher-than-average cuts. Nor have they indicated whether they will lift a rule that forces councils to hold referendums if they wish to raise council tax by more than 3% or 5% (depending on whether they have social care duties). The result is that voters are in the dark regarding the future of some of the services that matter most to them. The Local Government Association believes £6bn of additional funding is needed, over two years, to close the gap.
Councils in the most deprived areas face the most difficulties. Reform of the outdated, regressive council tax should form part of any serious levelling up agenda. Redistribution of resources between areas needs to be made easier. But while Labour and the Liberal Democrats have promised multi-year settlements, making it easier for councils to plan, neither has offered the comprehensive overhaul that is needed. The Tories are pledging a multi-year deal on social care only.
If Angela Rayner becomes communities secretary, following a Labour victory, renewing the relationship between central and local government should be at the top of her agenda. Meanwhile, the lack of transparency on budgets is bad for councils and bad for democracy. Voters ought to be enabled to make informed choices, not left guessing.
