News
Chancellor Jeremy Hunt urged ‘deliver the fair deal for Cambridgeshire that we deserve’
‘Unfunded pressures are pushing council finances to the brink’
Local Labour Leader Cllr Elisa Meschini has written to Chancellor Jeremy Hunt demanding that he delivers a fair deal for Cambridgeshire in the upcoming Autumn Statement. The letter comes ahead of the chancellor’s autumn statement on 22nd November 2023, in which he will set out the government’s spending priorities.
Cllr Meschini, deputy leader of Cambridgeshire County Council, believes the chancellor “has the opportunity to reverse the damaging Conservative cuts that have left many public services struggling to survive.
“Since 2010 the government has repeatedly cut funding to councils, leaving an increasing number of councils warning that they could effectively go bankrupt in the coming months”.
Cllr Elisa Meschini with Cllr Richard Howitt, chair of the county council’s adults and health committee
She said the cross-party Local Government Association have warned that a combination of rampant inflation, rising homelessness, and the increased cost of delivering services such as children’s social care mean councils are facing a £4bn funding gap by March 2025.
Cllr Meschini said: “Cambridgeshire deserves a fair deal. Government funding cuts have been unfairly targeted at areas like Cambridgeshire. The Conservative government has cut funding to our area by £136.6m in real terms since 2010, which is equivalent to a 67% cut in the funding we received from the last Labour government.
“Unfunded pressures are pushing council finances to the brink. Local family finances are still recovering from the Conservative government’s disastrous decisions that crashed our economy. The government should take responsibility for funding local services, rather than once again forcing councils to increase council tax bills.”
“The Chancellor must use the Autumn Statement to deliver the fair deal for Cambridgeshire that we deserve. If he cannot do that, the Conservatives should call a General Election and give the country the chance to vote in a new government that has a plan to give Cambridgeshire its future back.”
BRIEFING
- Local Government Association figures show councils in England face a funding gap of £4 billion over the next two years – a £1 billion increase since the LGA’s initial analysis in July as cost and demand pressures continue to rise. https://www.local.gov.uk/about/news/funding-gap-growing-councils-firmly-eye-inflationary-storm
TEXT OF LETTER TO THE CHANCELLOR OF THE EXCHEQUER FROM CLLR MESCHINI
Dear Chancellor of the Exchequer,
I am writing to you ahead of the Autumn Statement that you are preparing to deliver later this month, to set out Cambridgeshire’s current budget pressures, and ask you to take urgent action to preserve the vital public services local people rely on by delivering a fair deal for Cambridgeshire.
The Conservative government has cut funding to our area by £136.6m in real terms since 2010, which is equivalent to a 67% cut in the funding we received from the last Labour government.
Conservative funding cuts to councils have been unfairly targeted at areas like Cambridgeshire – in the same time period, council budgets in prosperous areas like Wokingham have only reduced by 3%.
Cllr Elisa Meschini, Deputy Leader of Cambridgeshire County Council and leader of the Labour group on Cambridgeshire County Council, has written an open letter to Chancellor Jeremy Hunt (above) PHOTO: Terry Harris
Government funding cuts and unfunded pressures have forced Cambridgeshire to make savings of £80m in real terms since 2010, which is equivalent to a 15% reduction in our overall budget.
Councils across the country, and of all political colours, are united in saying that local government funding is not sustainable. An increasing number of councils are warning that they could effectively go bankrupt in the coming months.
The cross-party Local Government Association has warned that councils in England will face a £4 billion budget shortfall by March 2025.
When Cambridgeshire set its budget in February of this year, the forecast budget gap for 2024/25 was £16.3m.
Chancellor has been warned: ‘If you cannot deliver a fair deal for Cambridgeshire, then the Prime Minister should call a General Election and give local people the chance to vote for a Labour Government that will give Britain its future back’. Above: Labour launch Cambridge City Council manifesto earlier this year
As at the 31st of October, that gap has widened to £23.6m. This is due mostly to a number of very high-cost children’s social care placements and a delay in receiving income from a newly constructed solar farm (which requires connection to the electricity grid).
In addition, demand for bed-based care for older people is also rising, following a period of reduction in demand and then stability stretching back to the beginning of the pandemic. In recent months, wage rises in many sectors have caught up with rising prices.
As much of the council’s services are people based and derived from workforce costs, both directly employed and through our supply chains, this does increase the risk of pressures of a “spiral” effect leading to increased costs for Cambridgeshire County Council.
We see this acutely in a number of areas where shortages of supply (such as for children’s social care placements), and reduced investment in the local government related workforce development during the last decade means we are predicting higher costs in future.
The outlook over the 5 years of the MTFS is also concerning.
Across the five-year planning period of 2025-2030, the unidentified budget gap is now £113.8m. A key pressure over the MTFS is the increasing cost of capital works and higher interest rates leading to increased costs of borrowing to fund the capital programme.
In Cambridgeshire County Council’s existing MTFS the cost of debt and the minimum revenue provision for prudential borrowing is scheduled to rise from £38.1m in 2023/24 to £44.9m in 2024/25, and Cambridgeshire has a significantly higher level of debt than the average English County Council.
Other issues that require government’s support are as follows:
- Inflation is a major factor which has not been properly accounted for in our Government funding. Inflation soared after your government’s mini budget crashed the economy and is still at a much higher level than anticipated and has added significant costs to our council
- Increased Children’s Services costs, which relate mainly to higher prices for supporting children and young people in residential and supported accommodation.
- Demand continues to increase for long-term care arrangements in Adult Social Care.
- Home to School Transport costs for children with special educational needs and disabilities (SEND) continue to spiral due to an increase in the number of children requiring it.
- Government migration policy, including the rapid closure of asylum hotels, is leaving councils to pick up the costs.
- Cambridgeshire has been waiting 13 years for an updated funding formula for our area. Every year that passes, we lose out due to outdated calculations which result in severe short-changing of an area like ours, which has been growing at twice the national rate but where the demographic and infrastructure pressures resulting from that growth have been largely ignored by Government.
These funding pressures are largely a direct result of government policy, including the disastrous mini-budget last year which crashed the economy.
Your government should bear the responsibility of meeting them, rather than once again forcing councils to increase council tax bills. This is simply not sustainable during a cost-of-living crisis.
If you cannot deliver a fair deal for Cambridgeshire, then the Prime Minister should call a General Election and give local people the chance to vote for a Labour Government that will give Britain its future back.
Labour has a plan for Cambridgeshire that will get Britain building again, switch on Great British Energy to reduce bills, get the NHS back on its feet, take back our streets from crime and disorder, and break down the barriers to opportunity at every stage.
Without immediate action councils will need to make increasingly difficult decisions about services we will have to reduce or stop all together.
You have an opportunity in the Autumn Statement to deliver a fair deal for Cambridgeshire – to protect vital public services and to avoid increasing the tax burden on families still dealing with the cost-of-living crisis that your government caused when you crashed the economy. We urge you to take it.
Yours sincerely,
Cllr Elisa Meschini
Deputy Leader of Cambridgeshire County Council and leader of the Labour group on Cambridgeshire County Council
