Press Room
Pre-budget report: is the party over for local government?
Commenting on local government spending and the Pre-Budget
Report, Damian Dewhirst, Associate Director at the Government and
Infrastructure Advisory practice of Grant Thornton, says:
"The party is over for local government spending. The pre-Budget
(PBR) report suggests that so-called unprotected expenditure by
local government needs to be reduced by 14% over the next
Comprehensive Spending Review period (2011 - 14). It suggests that
local government will need to cut non-essential spending by as much
as 4.5% per annum in the years 2011 to 2014 or raise Council Tax to
cover the difference. Local government could even be required to
make cuts as high as 5.5-6.0% in order to offset underlying
spending pressures in essential services like adult social
care."
"With spending on education, health and the police set to be
protected, around 48% of local government spending will be immune
from the cuts needed to restore the public finances. However, local
government will need to make drastic cuts in non-protected
expenditure areas."
"This would put an end to increases in local government spending
since 1997, which amount to 43% in real terms.
"However, it looks like local government is on track to deliver
21% efficiency savings over the period 2005-11. If that rate of
improvement can be maintained, the real reductions needed will be
more of the order of 2.5-3.0% a year. This means that by 2014 local
government spending would still be around 32% higher in real terms
than when Labour first came to power."
For further information, please contact:
Stephanie Aneto, Grant Thornton press office, tel: 020 7728 2940 or
email: stephanie.aneto@gtuk.com