LGA responds to Prime Minister's speech on Spending Review

15 Sep 2015 10:22 AM

Councillor Gary Porter, LGA Chairman, says it is right the Spending Review will prioritise radical devolution of power - but warns councils need fairer funding to make it happen.

Responding to the recent speech by the Prime Minister on the Spending Review, Cllr Gary Porter, Local Government Association Chairman, said: 

"It is right that the Spending Review will prioritise radical devolution of power within England. We agree that programmes such as Troubled Families and closer working across the public sector more generally results in better services and savings for taxpayers.

"Local people know best how to spend money and run services in their areas and the large number of devolution bids submitted to the Treasury shows the huge appetite within local government for greater local powers and funding over skills, housing, transport and health and social care.

"We urge the Government to match the ambition shown by cities and county areas by devolving, or handing greater local influence over, at least £60 billion of central government spending down to local areas.

"However, local authorities will face £10 billion worth of extra cost pressures by 2020 even before expected funding reductions. Further pressure will be placed on already stretched local services if the Government does not fully assess and fund new burdens for councils when making its spending decisions for the next five years. For the Spending Review to be sustainable to councils, decisions must be about spending smarter, not only about spending less.

"Councils hold the key to unleashing the full potential of local communities, helping balance the nation's books and improving our public services. Devolution is not enough to achieve this on its own and we also need the Spending Review to hand us the fairer funding to make that happen."

Notes

1. ‘Spending Smarter: A Shared Commitment', the LGA's 2015 Spending Review submission, focuses on proposals to help councils drive efficiencies and prioritise the radical devolution of power within England.

2. Councils will face almost £10 billion of cost pressures by 2020, comprehensive new LGA analysis ahead of the Spending Review reveals. Government policies to be implemented over the next five years will cost councils £6.3 billion by 2020 alone.

3. Local government is set to achieve £13.3 billion land and property sales up to 2018 while the Government had a target of realising £5 billion by 2020. The LGA's Spending Review submission recommends: 

• The Government to raise its target from £5 billion to £18 billion;
• Councils to be given the ‘power to direct' the sale of government-owned public land and the ability to retain 10 per cent of receipts (£1.3 billion) in order to build 180,000 new homes across the government-owned land.
• The remaining £11.7 billion in capital receipts should be used to fund the extension of Right to Buy.