Local government may struggle without a bailout

7 April 2020

By Zoë Billingham

1 minute read

CPP's Head of Policy & Engagement, Zoë Billingham, writes for the MJ, arguing that the government's emergency financial support for local government may need to be extended to stop councils across the country from becoming effectively insolvent.

Four weeks ago I found myself glued to the chancellor’s Budget speech. It was a first for Rishi Sunak as chancellor and for the new government. Originally intended as the post-Brexit budget, detailing the government’s commitment to levelling up, it was overtaken by coronavirus and additional announcements of support. However, the government’s promise to do ‘whatever it takes to support the economy’ will now likely need to go further, to prevent councils up and down the country becoming effectively insolvent.

While the crisis has been unfolding, there has been surprisingly scant reference to the perfect storm facing local government. Local government’s capacity to coordinate and deliver a response on the ground has been hollowed out as a result of a 40% cut in spending on non-statutory services over the past decade. Preventative spend in areas that would help boost resilience has been falling, including an 8% decrease in local public health spending between 2013/14 and 2017/18. Meanwhile demand for services, and in particular adult social care, continues to rise. And just as local government is tasked to raise more revenues locally, a pandemic hits, undermining many of its key revenue streams. Read the full article