BUDGET BUZZ

Oxygen looks at the real stories behind the Summer Budget and considers the impact on Local Authorities.

Councils spared further cuts 

It was right that the Chancellor has not taken steps to further reduce in-year local government funding. “The new government has used its first budget to loosen significantly the impending squeeze on public services, financed by welfare cuts, net tax increases and three years of higher borrowing,” said a Office for Budget Responsibility (OBR) report.

However, as the Guardian observed: “For councils that have already seen their funding cut by 40%, the chancellor’s plans to cut Britain’s deficit at the same pace as in the last parliament will still be grim – though progress on devolution is something to cling on to.”

Cllr Gary Porter, Chairman of the LGA, commented further: “Councils already have to find £2.5 billion in savings this financial year and these are proving the most difficult savings to find yet.” He added that “Without reform of the way public services are paid for and delivered, we predict councils could face a further £3.3 billion reduction in central government funding for local services in 2016/17 and a funding gap of £9.5 billion by the end of the decade.”

Devolution of powers and funding

George Osborne has said that he wants to “put the power in the northern powerhouse”. 10 councils in Greater Manchester are to gain control over fire services, a new land commission, children’s services and employment programmes, in exchange for a directly elected mayor. Sheffield, Liverpool, Leeds and West Yorkshire are negotiating similar devolution deals. The Chancellor is also in discussions with Cornwall, which could be the first county council to take control of devolved health and social care budgets. New enterprise zones will also be introduced for smaller towns.

In respect of devolving powers and funding to local areas , Cllr Gary Porter added that this “will allow councils to protect and improve vital services, tackle the big issues facing our residents and boost the prospects of the nation. Without this, the Government’s aims to boost housebuilding, abolish youth unemployment and find £12 billion of savings from working-age benefits cannot be achieved.”

All eyes within Local Government will now be fixed on the Spending Review in the autumn which will decide the future of public services over the next decade.

Late payment

Whilst we were disappointed that the issue of late payment was not addressed, much to the consternation of business groups, we are pleased to see incoming legislation take effect.