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LGA - Majority of council tax will soon be spent on social care

More than half of what people pay in council tax will soon be spent on caring for vulnerable children and adults, creating a huge squeeze on councils' ability to fix roads, clean streets and keep libraries open.

New analysis published by the Local Government Association today breaks down how every £1 of council tax is allocated by councils. It shows that even with people paying similar levels of council tax, money available for non-care services is set to drastically reduce in the next few years as a result of reduced government funding and rising demand on care.

For every £1 of council tax collected by councils in 2019/20, 60p will be spent on caring for the elderly, vulnerable adults, and vulnerable children. This is up from 41p in 2010/11.

By contrast, 1p in every £1 will be spent on street cleaning and flood defences, 5p in every £1 will be spent on road maintenance and street lighting and just under 5p in every £1 will be left to fund all libraries, leisure centres, parks, museums and arts.

Based on most recent figures, this would mean the average Band D council tax payer contributing almost £800 per year on social care and just under £16 per year on street cleaning and flood defences. £70 per year from the average Band D payer's bill would be spent on road maintenance and street lighting and £59 per year on libraries, leisure centres, parks, museums and arts.

The breakdown highlights the strain being placed on popular services and demonstrates the need for local government funding to be protected in the next parliament.

Core funding for councils from central government has reduced by 40 per cent since 2010 and the majority of councils say the scope for efficiency savings is coming to an end.

The LGA, which represents councils in England and Wales has published the analysis today as part of local government's Future Funding campaign, calling for the next government to protect local government funding. The projections show what will happen if cuts to local government in the next five years are similar to those which have been made since 2010 and council tax rates follow a similar pattern.

Chair of the LGA Cllr David Sparks said:

"This analysis shows the pinch that families all over the country will feel from central government continuing to reduce funding for local services 

"It is likely that people will be paying similar levels of council tax over the next few years but most will see a lot less in return. People are rightly going to question why their streets and parks are less well kept, the local library is closing and bus services are being cut when they are still paying roughly the same council tax each month.

"The reality is that, within a few years, well over half of the council tax everyone pays will have to be spent on social care.

"With demand on these life and death services continuing to rise and funding from central government continuing to fall, councils will have little choice but to squeeze budgets for libraries, roads and street lighting.

"No part of the public sector has faced bigger cuts to funding than councils during this Parliament and the efficiency savings local government has made since 2010 cannot be made again.

"If the services which bind together communities and underpin people's daily lives are to survive the next few years, the next government must provide fair funding and give local authorities the freedom required to pay for them."

Notes to editors

1 Local Government Finance Day

On Tuesday, 24th March the LGA and councils are holding a Local Government Finance Day. The LGA will be launching a film to highlight its Future Funding campaign and publishing infographics laying out the scale of the financial challenge facing councils and the need for the next government to protect local government funding.

2. Analysis

The analysis of how each pound of council tax is spent reflects the English average. While each council makes its own decision about funding for individual services, the LGA's analysis assumes they will continue to protect social care and waste collection and disposal budgets much in the same way they have done so far.

Local government expenditure (in £,000s)

Source of local government income (in £,000s)

3. The average Band D council tax bill in 2014/15 was £1,468. The LGA's analysis exclude the portion of council tax which goes to police and fire authorities. This varies by locally areas but is typically around 16 per cent.

4. The spending breakdown excludes spending funded through ringfenced grants (schools, housing benefit, public health, the Better Care Fund) and spending funded through fees and charges. This is because council tax and unringfenced grants will only be spent on what is not covered by specific, rigid funds.

5. The LGA's analysis assumes that £1 of any type of unringfenced funding (core government grants, council tax and locally kept business rates) contributes to services in the same proportion.

6. 2010/11 and 2013/14 figures are based on data collected by the Department for Communities and Local Government. 2019/20 figures are based on projections in the LGA's Future Funding Outlook 2014 model. 

Simon Ward

Deputy Head of News and Internal Communications
Local Government Association
Tel: 020 7664 3147
Email: simon.ward@local.gov.uk

Local Government House, Smith Square, SW1P 3HZ

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