Council spending in England to fall by 1% this year

Overall council spending in England will fall by almost £1bn or 1% this year, according to figures published by the Department for Communities and Local Government and CIPFA. CIPFA is warning that this further erodes confidence in councils’ financial resilience and ability to maintain core services.

In cash terms, the education budget is worst hit, losing £765m or 2.3%, although this is partly explained by a shift toward academies, funding for which will move from local government to the Department for Education.

Cultural services are braced for a 5.8% reduction (£145m) and fire and rescue services for a 1.3% cut (£28m). However, spending on both adult and children’s social care is set to rise by 2.2% (£308m) and 1.8% (£136m) respectively.

Council reserves are down to £21bn, a 1.5% reduction on last year, and of this amount, £17.3bn is earmarked for specific purposes such as schools and public health.

Rob Whiteman, CIPFA Chief Executive, said the outlook for councils was getting worse:

”These figures demonstrate the extent to which councils are suffering, without even taking into account the fiscal consequences of leaving the EU. Given that a Brexit may only compound the pressures, it is essential that local authorities undertake a thorough assessment of their financial resilience.”