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News release

Spending Round gives short term boost to local government

Paul Dossett, head of local government, Grant Thornton UK LLP, commented:

“Today’s Spending Round presented a generally positive picture for local government funding, with the announcement of the largest increase in spending power since 2010. This is a much needed increase for councils who are currently struggling to provide the vital public services our communities rely on every day.

“Demand led services have placed increasing pressure on councils’ funding, making up to 80% of total spend in many councils in 2017/18. We therefore welcome the announcement that local government will have access to an additional £1 billion of funding in 2020/21 for adults and children’s social care and, following consultation, will be able to levy the 2% adult social care precept again next year, contributing another £500 million from the taxpayer. The government has demonstrated a commitment to supporting the most vulnerable in our society and an increase of £700 million for children and young people with special educational needs, and an additional £54 million to help tackle homelessness and rough sleeping in local communities, will allow councils to continue to provide much needed care for those in need.

“The re-confirmation of the £3.6 billion Towns Fund, and a suggestion of increased focus on infrastructure in the future, is promising. However, given the ongoing housing crisis in our country and the focus on this in recent Budgets, it is surprising to see no further announcements in this Spending Round.

“Whilst the challenges facing local authorities won’t be resolved overnight, today’s announcement will help in alleviating some of the financial pressures in the short term. Councils now have a degree of certainty for the year to come, but will need to continue to maintain prudent controls over their finances to ensure their longer-term sustainability.

“Overall, the Spending Round has provided local government with the power to plan through to March 2021. As always the devil will be in the detail for each council: the detailed settlements for each individual council will be pivotal at a local level. Beyond next year, the full three-year Spending Review planned for next year will be vital to provide long-term, sustainable solutions and help resolve the critical funding issues facing the sector.”