'This is what we have been saying': Report warning of funding black hole for councils welcomed by Northamptonshire chiefs

The report by the Government’s own spending watchdog, the National Audit Ofice, looks at the increasing demand pressures councils are facing amid substantial central government funding reductions since 2010/11.

It also states that the Government delay in reforming the way local government is funded, scheduled to be implemented in 2021, is making the financial challenge harder.

The report goes on to warn that the challenges currently facing Northamptonshire are also being felt by other local authorities as a result of rising social care costs and low levels of reserves.

Northamptonshire County Council deputy leader Councillor Matthew Golby, said: “This report is significant for Northamptonshire because it endorses what we have long been saying about the growing financial challenge facing us and many other county councils.

“In our ongoing discussions with the Secretary of State we have been calling for an urgent review of the funding formula for local government and, as this report states, the delay in bringing this forward is having an impact on all of us.

“It also demonstrates that increasing demand and cost pressures in social care are having a real impact on our ability to provide non-statutory services and leading to some very difficult decisions having to be made both here in Northamptonshire and across the country.

“We hope that the best value inspection, which is due to report back next week, recognises these national pressures and the significant impact they are having in Northamptonshire.”

The National Audit Office report states that there has been a 49.1 per cent real-term reduction in funding for local authorities between 2010/11 and 2017/18, and a 28.6 per cent real-terms reduction in local authorities spending power (government funding plus council tax).

It also reports that 66.2 per cent of local authorities with a responsibility for social care had to use up some of their savings during 2016/17.

Meg Hillier MP, chair of the committee of public accounts, says Whitehall needs to provide a long-term funding fix for councils across the land.

She said: "Reductions in government funding for local authorities of nearly 50% over the last eight years mean councils have had to make stark choices about which services they continue to provide.

“Many councils are raiding their rainy day funds to pay for social care, and we have seen Northamptonshire County Council reach the brink of financial failure.

“Councils need to know what their long-term future is, but instead of sorting this out, Whitehall has used a series of short-term fixes to paper over the cracks”

To report the report in full, visit www.nao.org.uk