On the 18th December 2023, The Department for Levelling Up, Housing and Communities (DLUHC) announced their provisional local government finance settlement for 2024/25. The Government figures indicate that local authorities’ total core spending power will rise by 6.5 per cent in 2024/25.
This comes at a time when local authorities are under immense financial strain following years of Tory austerity, the impacts of the pandemic, cost of living crisis and rising inflation.
The Local Government Association (LGA) has estimated that councils in England face a £4 billion funding gap over the next two years. New LGA analysis has additionally shown that by 2024/25, cost and demand pressures will have added £15 billion (almost 29%) to the cost of delivering council services since 2021/22.
Despite this, the Government has presented its increase in local authorities’ core spending power as a real terms increase.
Cllr Simon Smith, executive councillor for finance and resources (Labour) said: “Once translated from Government spin to reality, the settlement applies to just a small amount of the council’s General Fund budget for day-to-day services.’
“The provisional figures could add approximately £968k to the council’s £74m budget.
“This is hardly going to make a significant impact, while local authorities are left to face larger and larger budget gaps. Additionally, the provisional statement assumes that councils will increase their council tax income by the highest amount, effectively forcing residents to pick up the bill.’
“The Government’s sleight of hand delivers little relief to the city council’s need to make up to £11m in savings over the next five years against cost pressures arising from the multitude of crises authorities are facing’.
“Cambridge Labour stands for prudent management of the council’s resources.
“Our investments for continuous improvement in services and making every £ work harder have never been more important to ensuring the council provides the services upon which everyone relies and the last safety net for people in greatest need.’
The LGA commented on the announcement stating:
‘Today’s settlement does not provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year.’
