Social care, street lighting and libraries said to be under threat after ministers confirm 6.7% funding cut for local authorities from 2016-20

Local authorities have warned of mounting pressure on already stretched local services, from elderly care to street lighting, after ministers confirmed that councils face billions of pounds more spending cuts.

Councils will be subjected to two years of especially harsh cuts from April after the government announced that town hall spending will fall by 6.7% between 2016 and 2020. The bulk of the reductions will be frontloaded into the first half of the period before, in theory, easing off towards of the end of the parliament.

The communities secretary, Greg Clark, said £3.5bn would be available to tackle growing demand for social care, by enabling local authorities to raise an extra £2bn through council tax and access to the £1.5bn Better Care Fund, which is effectively ringfenced for councils that provide elderly care services.

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Announcing the 2016-17 local finance settlement, Clark said he had listened carefully to councils’ concerns, including over social care funding. He claimed the resources available to councils from next year “go beyond what council leaders dared hope for even a few months ago”.

The settlement will do little to dampen local government concern that councils will be forced to close or restrict access to highly visible public services, such as home care for older and disabled residents, children’s centres, libraries and parks, at the same time as they increase council taxes for local residents.



Critics said the measures designed to offset the cuts would raise too little and come too late to address the immediate social care crisis, and warned they would not prevent an estimated £3.5bn shortfall in social care funding opening up by the end of the decade.

Newcastle city council said the settlement outlined by Clark added an extra £2m of cuts to the £30m it had already pencilled in for next year, immediately wiping out any benefit it would gain by raising extra care funds through a 2% council tax precept.

The council leader, councillor Nick Forbes, said: “This proposed 2% rise is a sticking plaster on a gaping wound, and it is our most vulnerable who will suffer as a result.”

He added: “Despite Mr Clark’s warm words, the reality is that local government will continue to bear the brunt of public sector cuts for another five years and that means more cuts to vital public services when people need them more than ever.”

Facebook Twitter Pinterest Newcastle council leader Nick Forbes said the city’s most vulnerable will suffer due to the budget cuts. Photograph: Christopher Thomond/The Guardian

The chair of the Local Government Association (LGA), Lord Porter, said: “While councils will strive to limit the impact on local communities they will face tough decisions about how to keep providing the hundreds of vital services which communities value and rely on to go about their daily lives, from keeping streets lit and clean to caring for our vulnerable children and adults.

“Our spotlight on social care funding pressures has been acknowledged, but councils remain concerned that they won’t see the benefit of the £1.5bn extra investment in social care until the end of the decade. Services caring for our elderly and vulnerable people are under pressure now.”

Simon Parker, the director of the New Local Government Network thinktank, said: “This settlement offers local government jam tomorrow, when the crisis is today. The pain is spelled out in black and white, while the gains are based on long-term estimates and heroic assumptions.”

Richard Humphries, the assistant directorof health and social care thinktank The King’s Fund, said the measures to address social care funding shortfalls were “a thoughtful attempt to make the best of a poor settlement” but did not address soaring demand for social care services.

Clark said that although local authorities would continue to have to make savings, overall spending power for councils in this settlement would remain relatively stable at £44.5bn in 2015-16 and £44.3bn in 2019-20.

However, the LGA said this “flat cash” settlement would still present significant challenges to councils facing soaring cost pressures, ranging from the national living wage to increasing numbers of vulnerable adults and children needing support.

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The government said councils would be given the option of a four-year funding settlement to give them financial certainty as the proportion of money they receive from central government shrinks over the next four years and they become solely reliant on funds raised locally through council tax and business rates.

Clark said: “This is an historic settlement for local government. It makes local councils fully responsible to local people for their financing – rather than central government – something that local government has been campaigning for over a number of decades.”

However, Labour’s shadow communities secretary, Jon Trickett, said: “The message of this settlement is the same as every other one under the Tories: cuts, cuts and more cuts.

“These cuts are a political choice and not an economic necessity.”

Councils warned last month that the cuts to municipal spending will increase the pressure on already stretched social care services for older and disabled people, and in many areas the closure or scaling back of children’s Sure Start centres, parks, museums and libraries.