Council funding: Sunak has turned a blind eye to disappearing community services
EMBARGO: Immediate Release
A Levelling Up, Housing and Communities Committee report has said that Councils were being hit by "systemic underfunding", as well as increased costs and demands for services.
Seperate House of Commons Library research, commissioned by the Liberal Democrats, has shown that the 2024/25 Council funding settlement will be a £5.75 billion, or 25% real terms cut on 2016/17.
Every single Council, bar one, the Greater London Authority, is expected to experience a real terms cut in funding. 218 authorities, more than two-thirds, will experience a real terms funding cut of more than 30%.
The Liberal Democrats are calling for Local Authorities to have more powers and funding to deliver for their communities and to reform business rates to boost local economies.
Liberal Democrat Leader Ed Davey said:
“Youth services are being torn away from children, the elderly are not getting the care they deserve, and motorists have to put up with dangerous potholes all because this Conservative government has left a blackhole in council finances.
“Instead of ensuring that councils have the resources they need, Rishi Sunak has turned a blind eye to disappearing breakfast clubs, tennis courts, and bus routes.
“The Conservatives have decimated council finances and it is local people up and down the country who are paying the price. Without proper funding for local services, it is communities and local people who will continue to suffer.”
ENDS
Notes to Editors:
First reported by the Mirror here.
The House of Commons Library data can be found here.
Sources:
Key Information for Local Authorities documents published as part of the Provisional local government finance settlement: England, 2024 to 2025, link here.
OBR's Public Finances data-bank, link here.
ONS population estimates here.
Table of councils which have not been reorganised and who have filed Section 114 notices since 2018 and their real terms funding cuts is below.
Local Authority | Real terms shortfall | Real terms cut | Real terms shortfall per person | Real terms cut per person |
Croydon | -£48.2 million | -32.9% | -£203 | -44.9% |
Slough | -£18.1 million | -30.6% | -£202 | -44% |
Nottingham | -£50.9 million | -27.1% | -£268 | -39.3% |
Northumberland | -£45.4 million | -34% | -£234 | -46.4% |
Thurrock | -£20.4 million | -31.2% | -£209 | -45.6% |
Woking | -£0.8 million | -25.4% | -£20 | -46.1% |
Birmingham | -£182.8 million | -25.8% | -£266 | -37.1% |
Notes from the Library
The real terms figures were calculated by using GDP deflator figures from the OBR’s Public finances data-bank to provide figures in both cash terms and real terms (2024/25 prices).
The Library has provided figures for the cash terms change, real terms change and real terms percentage change in settlement funding between 2016/17 and 2024/25, for all local authorities in England. Blank cells indicate that the authority in question did not exist in that year (due to reorganisation).
The ONS has recently changed its population estimates to rebase them on the results of the 2021 census. Population projections (which form the basis of the 2023/24 and 2024/25 per-person figures) have not been similarly rebased, so for these years we are using our own estimates rather than official figures. The figures for the overall per-person change in funding are therefore also unofficial.
Population figures for some local authorities are not available at all since the ONS’s changes. The names of these authorities are still included in the list, but they have no per-person figures included. Authorities where some figures are included but not others are those which were reorganised at some point between 2015/16 and 2024/25.
The recent government announcement will have little to no effect on these figures. This is because the figures are for settlement funding, which consists of revenue support grant and redistributed business rates.
The increased funding announced mostly affects social care grants and the funding guarantee, both of which are part of core spending power but not settlement funding. (For an explanation of the difference, please see sections 2.1 and 2.2 of the Library’s briefing for last year’s settlement, Local Government Finance Settlement 2023/24.)
The only way that the announcement might have an effect is if the extra funding announced for the Isles of Scilly and the Isle of Wight is delivered through their settlement funding rather than through a separate grant; however, even if that is the case, it will affect only those authorities.
