Further reductions to council funding would be “disastrous”, the LGA has warned in a letter to Chancellor Rachel Reeves ahead of her first Budget on 30 October.
The cross-party letter, jointly signed with other local government organisations, calls for immediate action to stabilise council finances and protect vital local services, amid a “perfect storm” of rising demand and cost pressures and inflation.
The LGA estimates that councils made £24.5 billion of savings and efficiencies between 2010/11 and 2022/23 because spending on services did not increase in line with cost and demand pressures.
The letter – signed by LGA Chair Cllr Louise Gittins and her counterparts at the County Councils Network, District Councils’ Network, Special Interest Group of Municipal Authorities, Core Cities, Key Cities, and London Councils – calls for measures to stabilise the sector’s finances in 2025/26, including:
- a significant and sustained increase in overall funding
- specific measures such as uprating local housing allowance rates
- multi-year finance settlements
- simplification of the number of funding pots
- an end to competitive bidding for grant funding
- certainty on finance reforms, including the business rates reset
- more financial freedoms and flexibilities.
The letter concludes: “Stabilising the local government sector financially will not only protect key services, it will also provide a return on investment to the taxpayer, while improving outcomes for the people and places councils serve. From giving young people a good start in life and pursuing preventative strategies, to unlocking and enabling talents, skills, spaces and places, a robust and sustainable local government sector will be critical to the realisation of the Government’s growth, housing, planning and infrastructural ambitions for our country.”