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LGA - Cuts without reform will leave £20 billion shortfall at the frontline

Frontline council services face a funding shortfall of up to £20 billion a year by 2015 if budget cuts in the Government’s spending review are imposed without reform of the way the public sector operates, local government leaders warn recently.

A submission to Chancellor George Osborne by the Local Government Association, an all-party organisation representing 350 councils in England, warns that councils will be forced to make cuts to vital services if a spending squeeze of that scale is imposed.

The estimated annual shortfall - equivalent to more than the entire adult social care budget in England and Wales – includes possible Government spending cuts and unavoidable increases in demand for services which councils must meet.

It includes:

  •  Anticipated cuts in central government grant funding, other than schools funding, of 20 per cent.
  •  An estimated £5.6 billion increase in the cost of adult social care by 2015, to meet the needs of Britain’s growing ageing population.
  •  Meeting an estimated £1bn increase in the cost of waste disposal by 2014-15.
  •  Covering the costs of predicted increases in demand for primary school places, children’s services and child protection costs
  •  A potential increase of up to 20 per cent in the £1.1 billion cost of concessionary bus travel for pensioners. 

The report calls for wholesale reform of the way the public sector operates, to devolve power over a host of services to a local level. The LGA estimates such reform could save at least £20 billion a year without harming frontline services.

The report has 20 proposals to cut red tape and improve services. They include:

  •  Funding for local public services to be pooled into local budgets – to save up to £100 billion over five years.
  •  All ring fencing on local authority budgets to be removed.
  •  Integrate health and social care policy.
  •  Pool funding for local infrastructure projects.  

Baroness Margaret Eaton, chairman of the LGA, said:

“Councils deliver hundreds of frontline services from collecting rubbish to helping elderly people live independently in their own homes. They have made huge efficiency savings in recent years, and the scope to make further savings without cutting services is limited.

“We know the public sector is facing deep cuts in the Government’s spending review. We have laid out practical plans to deliver big savings by cutting out unnecessary waste and red tape in the system and devolving control over public services to local people who know best what their areas need.

“Ministers have moved quickly to cut burdens on councils, but they need to introduce further reform to make the savings we think are possible.

“People will not forgive those who cut frontline services without first exhausting every possible avenue for cutting unnecessary waste, complexity and red tape within the system. 

“Local public services like after-school clubs, meals on wheels and care for the elderly or youth work should not be put at risk because of Whitehall turf wars with civil servants refusing to devolve their department’s budget because central government knows best.

Author: LGA Media Office
ContactTel: 020 7664 3333

Notes to editors:

Read the executive summary of the LGA’s submission to Government

Read the full LGA Spending Review 2010 submission

The LGA has published detailed plans for reform of the public sector to deliver £100 billion in savings over five years.

All figures are in cash terms.

 

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