Cllr David Simmonds is the Deputy Leader of Hillingdon Council and Deputy Chairman of the Local Government Association.
Over the next few weeks, councils across the country will be setting their council tax for the coming financial year. It’s a useful moment to reflect on an important issue that feeds into wider debates about taxation and spending, especially on social care – which consumes around two-thirds of council spending, and rising.
There are many different figures quoted for what comprises council spending. What is consistent is that all of them demonstrate a significant reduction since 2010. How much of a reduction exactly, and how it impacts, is the subject of political debate as we move towards a new funding system for councils, which has been long-promised. The main components are, and will remain, council tax and business rates. Council tax will continue to be collected and spent locally and business rates continue to be pooled by government then handed back through a combination of grants. The other main spending factors, the Dedicated Schools Grant, Housing Revenue Account, and Parking Revenue Account are ring-fenced away from general spending and with the exception of parking charges, largely out of the control of local authorities – and with a few exceptions most parking revenue accounts don’t raise much money.
The charge that we see being levelled at the government in the press is that the proposals funnel money away from high-need (Labour) areas to more affluent (Tory) ones. As evidence of this intent we are told that cuts to spending have hit Labour areas hardest. This ignores the fact that you cannot cut what you never had in the first place. Having listened to the concerns, during the Labour years, of Conservative councillors who saw funding being funnelled to Labour areas through specific grants that sat outside the funding formula, it strikes me as a hollow argument today to claim that cuts ‘hit them hardest’ – when they have enjoyed much more generous financial support, on the whole, than areas that favour the Conservatives.
This should not be allowed to distract from the areas where there is clear evidence of financial pressure being acute. Across local government, politicians are getting tired of hearing their parliamentary brethren making promises, then dumping the cost onto council taxpayers. Special Educational Needs, Asylum Seeking Children, working-age adult social care, homelessness, are just a few policy areas where sensible initiatives and legal entitlements are simply not funded at their cost. It is indicative that the only area of council spending to have grown consistently Is children’s social care – everything else has been cut, and not just in line with reductions in central government grant, but hollowed out to fund the massive rise in the numbers of children in need.
As we file into council chambers across the land in the coming weeks, all councillors will need to have an eye to how we move to a much more sustainable financial model that reflects the legal obligations of local authorities – and that frees them up to lead their communities in a way that reflects a stronger identity for their ‘place’. The work done by the Local Government Association and contributed to by the Conservative Councillors’ Association is a step in a more positive direction. The councillors and the communities they will serve in the future will thank us if we get it right.