A tough year ahead for local government finance

It’s going to be another tough year for local government finances, with virtually all local authorities planning to increase council tax, one in ten councils warning that they may not be able to meet their statutory obligations and confidence in the sustainability of local government finance remaining low.

LGIU SOLGFS 2020

That’s the conclusion of the Local Government Information Unit’s State of Local Government Finance Survey 2020, which brings together the views of leaders, chief executives, cabinet members and directors of finance from councils across England.

The top immediate financial pressures identified by councils are childrens services and education, while adult social care remains the issue of greatest concern in the longer term.

And there is near-universal disappointment in the Government’s lack of progress in delivering a sustainable funding system for local government or a longer-term strategy for social care.

On a more positive note, the current issues around funding are helping to generate greater interest in alternative funding models for local government, such as a local income tax, having more freedom to levy other local taxes, a local share of the new digital tax, some form of tourist tax, and a local share of corporation tax.

Furthermore, nearly all councils responding to the survey say they are planning work to tackle climate change. And they continue to make bold decisions as they seek to generate new income and to protect the quality and the financial sustainability of the services that they provide to their local communities.

Read the full survey report on the LGiU’s website.

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