We are all aware of the potential for impending cuts in services like the NHS funded directly by Central Government and, as Greens, we will no doubt have been horrified by the Government’s failure to tackle the real causes of the energy crisis and fuel poverty. We are no doubt saddened and angered by the worsening inequality caused by the government’s tax changes and the refusal to restore the uplift in Universal Credit peremptorily removed as the pandemic eased.
However, many of us may not yet have realised the potential severity of government policy in respect of potentially crippling cuts in those public services provided by local government, as we approach the period when councillors up and down the country sit down to determine their council budgets for 2023-24.
Central Government’s support for local government and the proportion of the business rate retained by local authorities have been reduced dramatically over past years. The Government has been promising a ‘fair funding review’ for local government since 2016, but it gets delayed every year, and it is certainly not going to happen this year – following confirmation by the newest local government minister.
The government used to provide a three-year financial settlement which gave councils some ability to plan. In recent years, however, this was reduced to an announcement in late December for the following year’s funding only. The Secretary of State for Levelling Up, Housing and Communities, Michael Gove, promised – under the Prime Ministership of Boris Johnson – a two-year settlement, but it is now uncertain that this will materialise.
The Government’s announcements about energy still require clarity as to how far they relate to local councils. And inflation volatility will add challenges in terms of energy costs, contract payments and the capacity to pay an increase in wages. Those with many years of local government experience have never known so much uncertainty around costs and funding, including through the 2008/9 recession.
The Bank of England is predicting that inflation will hit 13 per cent by early 2023. It is likely that the Government will cap rises in council tax and in rents to well below this figure, and, in any case, many councils will naturally be reluctant to raise council tax and rents by much at a time when the poorest and most vulnerable in our communities are suffering massively. In short, what this means is that councils will be rendered incapable of funding anything like the level of public services in 2023-24 that were provided in 2022-23 – and at a time when the councils should be providing greater, not less, support for the communities they serve.
Finance officers in local government are seeing new levels of uncertainty around funding and costs. Green Party councillors in power in local government will be facing real challenges as we grapple with budget planning for the coming financial year. The prospect of cuts in locally provided services and the capacity of local government to support local communities has never been so bleak