Some interesting figures came out this week on council spending. Just under £100 billion was spent in 2011/12 – 56.6% in Government grants, 19.2% in redistributed Business Rates, and 26.6% in Council Tax.
After allowing for inflation, council spending was down by 8.7% in 2011/12 on 2010/11. If total state spending of nearly £700 billion had fallen by this amount last year, and fell by the same again this year, we could roughly clear our £120 billion budget deficit. This year we would have a balanced budget instead of the dire public finances which remains the reality. Instead we have local government spending going down, but central government spending going up. Let's also give some recognition to the Town Halls, that while their spending has gone down, overall satisfaction with local services has risen.
What is surprising about the council finance figures is that they also show a rise in council reserves from 14.2bn in 2011 to 16.4bn for 2012. In 2010 the figures stood at 13.3bn, so there is a continual upward trend. Astonishing isn't it? If you don't believe me look at page 16.
When are they expecting the rainy day to come?
Local Government and Communities Secretary Eric Pickles said:
"People will be surprised that councils are hoarding billions in their coffers whilst at the same time some are pleading poverty .
"Whilst local authorities should maintain a healthy cushion, it's time for them to tap into their substantial reserves to ensure they protect frontline services, with a view to building up their reserves again in sunnier days to come."
"Given the rise in reserves it is disappointing and irresponsible, that some sections of local government have chosen to needlessly scare the public with unfounded predictions of doom and gloom."