Local councils warn of critical funding crisis as £18bn grant is scrapped

From The Guardian: Town halls are facing a £4.1bn a year black hole in their budgets that not even the closure of every children’s centre, library, museum and park could fill, council leaders have warned.

George Osborne’s decision to axe the central government grant to councils over the next four years came in a comprehensive spending review that the Local Government Association (LGA) chairman described as a tragic missed opportunity to protect the services “that bind communities together, improve people’s quality of life and protect the most vulnerable”.

Some of the most stretched councils warned that the changes would hit the poorest parts of the country hardest, where there were fewer businesses and taxpayers to make up for lost Whitehall grants.

The Labour leader of Newcastle city council, Nick Forbes, said the move would leave a £16m hole in his budget.

“The impact of removing government grants and leaving the city dependent upon taxing businesses would leave us £16m a year short, on top of the cuts we are already making. If these issues are not addressed, rich councils will get richer at the expense of the rest of us,” he said.

Liverpool city council said its social care bill currently stands at £172m a year, while the 2% increase in council tax unveiled by Osborne to help fund care for the elderly and people with mental health and other problems would only generate £3.2m a year.

The LGA chairman said: “It is wrong that the services our local communities rely on will face deeper cuts than the rest of the public sector yet again, and for local taxpayers to be left to pick up the bill for new government policies without any additional funding,” he said.

“Even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light, they will not have saved enough money to plug the financial black hole they face by 2020.”

He warned that such services could be lost altogether as councils “protect life and death services, such as caring for the elderly and protecting children, already buckling under growing demand”.

Dot Gibson, the National Pensioners Convention general secretary, said: “The social care system has suffered £4.6bn worth of cuts since 2010, and the chancellor’s plan to allow local councils to raise additional spending will be nowhere near enough to address the problem.”

Dr Rhidian Hughes, the director of the Voluntary Organisations Disability Group, which represents voluntary providers of social care for adults with disabilities, said the social care funding settlement was “woefully inadequate” and that the failure to invest in the sector was “a disgrace”.

[Read full article on the Guardian website…]