local authority budgets

Slough goes bankrupt after discovery of £100m ‘black hole’ in budget

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This story is about Slough but Copeland, Peterborough and Redcar and Cleveland, which feature in the story, all have significant rural components. It explains how the pressure is bearing down on many local authorities. It tells us:

Slough is the third English council to become effectively insolvent in the past three years, following Northamptonshire and Croydon, and its predicament reflects a much wider precariousness in local government. The National Audit Office warned in March at least 25 authorities were on the brink of bankruptcy.

Eight councils, including Slough, were told earlier this week they faced an independent government-commissioned review into their finances as ministers decided whether to bail them out financially. The others are Bexley, Copeland, Eastbourne, Luton, Peterborough, Redcar & Cleveland, and Wirral.

Although Slough said its finances had been hit hard by the impact of Covid – leading to a collapse in council tax and business rates income – a report by its chief financial officer, Steven Mair, made clear the problems were deep-rooted and linked to accounting errors, lax financial controls and poor decisions.

“Slough’s financial problems have not arisen in the past few months. The approach to financial decision-making, leadership and management, processes, quality assurance and review etc that has been adopted by the council over a number of years was not robust and consequently highly detrimental to the council,” Mair’s report said.

Many of the problems recently uncovered related to previous years, the report said, and had they been know about at the time it is likely that the council would have been unable to meet its legal duties to set a legally balanced budget – raising the prospect it could have been technically insolvent as early as 2019.

Luton council draws up emergency cuts to avoid bankruptcy

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Poor Luton, however I fear the local government landscape is about to change radically over the next 5 years. Without major action the coronavirus will push many authorities over the edge and then what? National Government can borrow its way out of trouble, the NHS can overspend without the sanction of closure, why is local government treated so comparatively harshly when it underpins many of the services which are equally important to people’s quality of life? This article tells us:

Luton borough council is drawing up drastic cuts to services to avoid bankruptcy after after a coronavirus-related collapse in passenger numbers at Luton airport blew an estimated £49m hole in its budget.

The council described the impact of the projected drop in revenue from the airport as a “nightmare scenario”. As the owner of the airport, it was receiving a £20m annual dividend, which has helped it maintain local services despite £130m of funding cuts since 2010.

It has been forced to plan a July emergency budget that will cut £22m, or 16% of its annual spending. “The airport has held back the tide of austerity in Luton, but coronavirus has broken those defences,” said Andy Malcolm, the council’s cabinet member for finance. “We are now going to feel the full force of austerity in council services.”

Local authority leaders called for a long-term stability plan for councils after figures suggested that continuing income losses from coronavirus-related shortfalls in council tax, business rates and commercial investments would run into several billions over the next few months.

Estimates based on the latest monthly government survey of councils’ financial projections suggest that local authorities remain on course for a £9bn-£10bn net shortfall this year, as the extra costs of meeting Covid-19 pressures in areas such as social care and homelessness continue to mount.

But there is growing concern that even if cost pressures start to reduce as the lockdown eases, many councils will face long-term structural deficits as record job losses and a faltering economy reduce income from local taxes, rates and business investments.

Cornwall leads calls for more money for rural areas

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Interesting initiative by a long established RSN member…

A major new report has called on the Government to provide more support to rural areas which are being missed by Government policy.

Land of Opportunity – England’s Rural Periphery has been published by the New Local Government Network (NLGN).

It was written in collaboration with a group of 12 local councils, led by Cornwall Council, brought together as Britain’s Leading Edge which is aiming to highlight how the Government focus is on urban areas with rural areas being left out.

The report puts forward three key “asks” of the Government which could help improve the opportunities of rural areas, their businesses and residents.

The first is “a stronger, rebalanced national economy” which includes an industrial strategy that works for both rural and urban areas; a UK Shared Prosperity Fund that minimises regional inequalities and more devolution to rural and peripheral areas.

“Improved social cohesion and mobility” is the second area with calls for a new Rural Social Mobility Fund; employment and skills devolution to rural areas and improvements to transport infrastructure.

Lastly it calls for “21st century living and working” with a need for excellent digital connectivity in rural and peripheral areas; more innovative approaches to improving mobility in rural areas and linking them with the rest of the UK; and the establishment of a high profile 21st century rural commission.

Rural roads ‘getting worse’, say drivers

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I’m not one to stir up rural/urban division but townies driving on some of the roads we have to use could literally fall into a well of controversy about funding fairness according to this article…

Half of drivers (49%) say the condition of local roads has deteriorated since last year, primarily as a result of potholes and other road-surface problems.

Only one in 10 (11%) believe the roads in their area have improved, with around four-in-10 (40%) saying there was no real change in the past 12 months, according to the 2019 RAC Report on Motoring.

There appears to be a clear town-versus-country divide in terms of road maintenance with drivers based in rural locations being almost 10% more likely to say their local road conditions have worsened in the past 12 months (rural 58% v UK average 49%).

Meanwhile, 25% of London-based motorists say conditions are in fact better this year, against the UK-wide average of 11%.

While potholes and related road-surface problems take most of the blame for worsening conditions, they are not drivers’ sole concerns.

There has been a sharp rise in dissatisfaction about grass and foliage maintenance on local roadsides, with 22% of drivers saying this is one reason conditions are worse.

Local government will have £25bn funding gap, report warns

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It would seem that notwithstanding a bevvy of election giveaways the fundamental malaise in terms of local government funding is set to remain. This story tells us:

Local government will face a £25bn funding gap in the coming years as reforms mean grants are being cut to “almost zero”, a new report has warned.

A few ring-fenced grants will account for less than a tenth of local authority expenditure by 2025, said the Trades Union Congress (TUC) and New Economics Foundation (NEF).

Councils will keep a higher proportion of business rates, but the report said there are major problems with the funding reforms, including greater exposure to the economic harm from a no-deal Brexit.

The report said around half of local-government funding came from central government in 2010, but by 2024-25 this will have been cut to zero, apart from a small amount of ring-fenced funding.

The funding gap will continue to increase, especially as demand for services will grow as people live longer

All English councils told to appoint ‘Brexit lead’

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There is a pattern in central/local Government relations. Central Government makes a mess. Local Government is then asked to clear it up whilst taking the blame. This truism came to mind as I read this article which tells us:

English councils have been told to designate a “Brexit lead” to work with central government to prepare for the possibility that the UK will leave the European Union with no deal at the end of October.

But a £20m funding pledge to help authorities step up preparations was immediately described as an “insult”, as the Ministry for Housing, Communities and Local Government (MHCLG) was forced to concede that the full amount had already been pledged in previous announcements.

 In the new policy announced on Saturday, Robert Jenrick, the recently appointed communities secretary, instructed authorities to appoint staff in every community to plan intensively for Brexit with local stakeholders.

The funding was being made available for communications as well as for recruiting and training new staff, Jenrick said.

Officials were considering how best to allocate the cash to ensure that those areas facing more acute potential stresses, such as ports of entry, get the funding they need. Shared equally, it would amount to about £57,000 for each of England’s 353 councils and combined authorities, according to the Guardian’s calculation.

The Labour MP Jess Phillips said: “The idea that £20m across the 353 main councils of England is enough to prepare is an insult to our intelligence and to the hard work of public servants struggling with the consequences of the government’s decision to force a vicious Brexit on us.”

Criticism intensified after a MHCLG spokeswoman admitted half the pledged funding comes from the chancellor Sajid Javid’s £2.1bn announcement on Thursday. The other half comes from funding announced by the department in January, she added.

Surge in children seeking mental health support from cash-strapped councils, figures show

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Councils just aren’t equipped to meet these allocation of resources across the UK to properly meet the needs of this vulnerable client group. This story tells us:

Soaring numbers of children seeking help for mental health issues have been blamed on savage cuts to local authority budgets.

Politicians and council leaders are calling on the government to inject funding into children’s services as an analysis of figures reveals the number of youngsters identified by councils as having mental health problems has surged by 54 per cent in four years.

The figure rose from 133,600 in 2014-15 to 205,720 in 2017-18, with more than 560 cases recorded every day last year on average.

The Local Government Association (LGA), which carried out the analysis, said children’s centres and family support services – “vital” for looking after children before problems become more serious – had lost 60p out of every £1 they had from central government over the past decade.

Some of these services have subsequently been stripped back or ended altogether, with about 1,000 Sure Start centres – which provide early years health and education services – having been forced to close down since 2010.

Crisis in special educational needs drives parents to court

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This article helps me reflect on how sad it is that Local Government is taking the rap for a gross dereliction of duty in using national resources to fund an issue which is way beyond the scope of local communities. It tells us:

A funding shortfall for children with special educational needs has led to a surge in court appeals, as families turn to legal action to secure extra help from cash-strapped councils.

With a 26% rise in the last financial year in the number of court appeals by families, MPs are warning of a crisis in special needs care. It is the third successive year that an increase has been recorded. The total of 6,374 appeals lodged in 2018-19 was almost double the number of three years earlier, according to analysis by the Special Needs Jungle website.

The increase in legal action comes amid what insiders describe as a perfect storm hitting provision for special educational needs and disabilities (Send). Schools are struggling to meet the extra costs. That is heaping further pressure on councils, which have a legal obligation to provide care for children that require it. That in turn has led more families to the courts to fight for resources for their children.

A backlog of cases is growing, and more judges are being recruited to deal with the workload. And after almost a decade of funding cuts to local authorities, families are now challenging the government at the high court over its funding for Send.

Third of councils failing to build enough homes for local people

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This article creates a completely erroneous impression of the responsibility for a lack of local housing. It should say National Government is “failing to build enough homes for local people”. Local authorities, as we all know have been financially completely hollowed out. Where these failures exist is at the level of national planning. The one positive coming out of this is the fact that local people are getting sufficiently fed up with it that they’re finding their own solutions through bodies such as Community Land Trusts. This article tells us:

Almost a third of councils in England have failed a new government test of whether they are building enough new homes for local people.

New analysis reveals that Conservative councils were the worst culprits, with 35 per cent having failed ministers’ “housing delivery test” – including housing secretary’s James Brokenshire own local authority. 

Many Labour councils also failed to build enough homes, with 29 per cent not meeting targets, as did 33 per cent of those under no overall control. Four of the 12 Liberal Democrat-controlled councils (33 per cent) also fell short.

The figures are the first to show how many councils have failed the government’s housing delivery test, which was introduced last year.

The results are likely to fuel concerns that cash-strapped councils are struggling to cope with growing demand for new housing. 

While 219 councils met their target, 107 did not, with their combined shortfall totalling almost 64,000 homes – equating to a 30 per cent shortfall across the 107 councils.

Councils spend millions on agency social workers amid recruiting crisis

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I wonder how we might undo this process of agencies becoming “for profit” middlemen in the provision of key services, which underpin the quality of life of, amongst others, vulnerable people, in rural areas. This story tells us:

Local authorities are having to spend millions of pounds on social work agencies as they struggle to recruit permanent staff, with some authorities employing nearly half of their children’s social workers through private companies, a Guardian investigation has found.

Data obtained through freedom of information requests shows that many English councils are routinely spending tens of millions of pounds – a total of at least £335m in 2017/18 – hiring agency social workers.

Experts said the difficulty experienced by councils in attracting permanent staff meant vulnerable children and families were often seeing multiple social workers in a single year, making it harder for them to engage with services.

They said the large-scale use of agency social workers was a poor use of dwindling local authority funds, as locums received a higher hourly rate than permanent staff, on top of the fee paid to the company they were employed through.

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