Local councils warn of critical funding crisis as £18bn grant is scrapped

Town halls are facing a £4.1bn a year black hole in their budgets that not even the closure of every children’s centre, library, museum and park could fill, council leaders have warned.

George Osborne’s decision to axe the central government grant to councils over the next four years came in a comprehensive spending review that the Local Government Association (LGA) chairman, Gary Porter, a Conservative peer, described as a tragic missed opportunity to protect the services “that bind communities together, improve people’s quality of life and protect the most vulnerable”.

The chancellor had announced “a revolution in the way we govern this country” by giving town halls far greater fundraising powers, allowing them to keep 100% of business rates, rather than the current 50%, and increase council tax bills by 2% to pay for rising social care bills. But they will lose the grant worth £18bn across councils in England, according to the LGA.

Source: Local councils warn of critical funding crisis as £18bn grant is scrapped | Society | The Guardian

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2 thoughts on “Local councils warn of critical funding crisis as £18bn grant is scrapped

  1. Roy Beiley

    If the Govt is no longer to provide Grant funding to local govt by 2020 then the outcomes will be horrendous. If they cap Council Tax increases then those councils in the poorer areas will suffer the most since the income from the full 100% of business rates will not compensate. Get ready to see a whole raft of local services axed completely and councils having to slim down their elected member and paid officer numbers. No doubt Cameron will be taking the Leader Oxfordshire County Council to task once more when his dustbins do not get emptied or there are potholes at the end of his road. Bring it on!!

  2. Dez

    Nice one…..letting the local councils become the fall guys and take the brunt of the major aggro that will follow…..neat, but cowardly. Those effected Councillors will start to earn their expenses and for once face many very unhappy bunnies. Maybe it is just a ploy to get them Councils to enage brain cells and think about macro consolidations of disctrict councils and flush out the duplications etc etc.

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