Councils face £5.8bn funding blackhole by 2020 warns Tory Peer

It's impossible to cut local services further, the Local Government Association says

Local councils are set to lose 80 per cent of their central government funding within the next three years, putting public services in further jeopardy, Lord Porter, chairman of the Local Government Association, will tell the organisation’s annual conference this afternoon.

The head of the influential body will say that there is ‘huge uncertainty’ about how local services will be funded in the future, following a 75 per cent cut in funding from central government over the past three years.

Lord Porter, a Conservative peer, will tell the conference:

“Even if councils stopped filling in potholes maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they still would not have saved enough money to plug this gap by the end of the decade.”

Local government has had its central government funding cut by £15.7bn since 2010, the LGA says.

Lord Porter will say:

“If austerity is coming to an end, councils [must be] at the front of the queue.

“Councils can no longer be expected to run our vital local services on a shoestring. We must shout from the roof tops for local government to be put back on a sustainable financial footing,’ the Conservative peer will say.

“Local government is the fabric of our country, even more so during this period of uncertainty for the nation. Councils are the ones who can be trusted to make a difference to people’s lives. To build desperately-needed homes, create jobs and school places, provide the dignified care for our elderly and disabled and boost economic growth.”

Some local councils are ‘running out of options’, the Financial Times reported this morning.

Preston in Lancashire, which, like many councils, has been making up the shortfall in central funding by using its cash reserves to balance the books, is coming perilously close to bankruptcy.

“Without the reserves we would be bankrupt,” Martin Rawlinson, a Labour councillor in Preston told the FT. “We only have £6m left, that’ll be gone in two years.”

This dire financial situation is despite Preston laying off hundreds of staff, selling buildings and cutting its budget almost in half over the past five years.

The LGA will call for greater central government funding, powers for local councils to raise council tax, and for local councils to keep the business rates they collect.

Oscar Webb is a reporter at Left Foot Forward. He tweets here

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