Ian Austin MP

Labour MP for Dudley North

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Austin calls on the Chancellor to address funding shortfall

Dudley MP Ian Austin has called on the Chancellor Phillip Hammond to address the shortfall in local government funding ahead of this year’s Autumn budget.  

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According to the National Audit Office, there has been a 49.1% real-terms reduction in government funding for English local authorities between 2010-11 and 2017-18.

Cuts to council funding has stripped away cash from the services the Council provide for local people. Dudley Council has lost £76 million since 2010, and this will rise to £92 million by 2019/20. The cutbacks have almost halved the money available for education, roads in the borough, social care, youth clubs, libraries, nurseries and other services.

Towns like Dudley have suffered far worse than wealthy areas, South Cambridgeshire were even given an increase of £14 per household in 2017 whilst our area lost out. Urban areas have been hit hardest, with households in Dudley losing £344, Sandwell £558 and Birmingham £695.

Austin has signed a cross-party letter to Philip Hammond requesting additional funding for councils in England in this year’s Budget.

Ian Austin Said:

“We all know savings have had to be made, but years of cutbacks have left Council’s barely enough money to function properly.  

“Cuts have had a devastating effect on frontline services for local people. Councils are the first point of call for children in need of care, for those facing homelessness and those fleeing domestic abuse and violence or caring for the elderly. They are responsible for maintaining our local infrastructure, maintaining green space, bin collections, libraries, leisure facilities and youth services. Yet funding for these crucial services has halved since 2010.

“It is not enough for the Government to give local authorities the power to raise council tax, they should be providing them with the adequate resources to do their job. I want to see an end to these devastating cuts and a plan for proper investment into the frontline services we all rely on”

 

Full text of the letter

Dear Chancellor,

We are writing to express our concern at the ongoing shortfalls in council finances across the country, and to request additional funds for councils in England – and indirectly for councils in Scotland and Wales through the Barnett formula - in this year’s Autumn Budget.

According to the National Audit Office, there has been a 49.1% real-terms reduction in government funding for English local authorities between 2010-11 and 2017-18. The Local Government Association (LGA) has identified a funding gap of £5.8 billion by 2020, which must be filled if councils are to avoid cutting back vital services. An ageing population, more complex needs of residents, and a growing population, mean that there is more pressure on services now than ever.

We note that the Government has given councils more power to raise council tax, and many have now done so. However, we fear that this is not enough – in 2016-17 councils in England overspent their budgets by £816million. Meanwhile, since 2010 more than 220,000 staff have been made redundant in English councils, according to the Local Government Chronicle, and many more posts have been deleted or left unfilled.

The Conservative leader of Somerset County Council, David Fothergill, describes the funding system as “broken”. We welcome the Government’s clear commitment to addressing the overall funding system for local government. However, our fear is that for some councils, this will be too late.

We are also concerned about the situation in Scotland and Wales. While we understand that councils in these parts of the UK are not directly funded by central government, through the Barnett Formula, we are also requesting that Scottish and Welsh councils have the opportunity to receive additional funding they need to deliver vital services. We are calling on you to:

  • Increase the levels of central government grants to local authorities in this year’s Budget  
  • Reinvest the surplus generated from business rates, giving the money back to local councils to assist with the social care funding gap

We would like to stress the urgency of this situation, as councils across the country are forced to make difficult decisions to close children’s services, cut housing support, and even struggle to collect council tax on time.

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