‘Cliff edge’: Crippled council services face collapse under austerity, experts say

(Reuters / Neil Hall)
Vital public services such as social care for the elderly could crumble unless local authorities get more control over their spending, a report warns.

In research published on Wednesday, the Independent Commission on Local Government Finance (ICLG) said UK local authorities require “urgent devolution of powers, funding and taxes.”

It stressed councils are on a “cliff edge” as a result of crippling government cuts, adding essential public services are threatened extinction.

The Commission, consisting of economists, public service and finance experts, was founded by Britain’s Local Government Association (LGA) and the Charted Institute for Public Finance (Cipfa).

In its report, the group predicted further cuts to councils’ already beleaguered budgets in the next Parliament. Among the public services expected to be hit are policing, fire services, children’s social care and culture.

The Commission’s research says many services offered by local authorities will cease to exist if councils are “not given the freedom to determine their own priorities and how they pay for them.”

It recommends a decade-long process of reforms.

Among the measures proposed are increased council control of spending on housing, social care and employment, and freedom for local authorities to allocate the precise value of council tax bands.

The report also calls for council tax referendums to be scrapped. At present, local authorities can’t raise council tax by certain degrees unless they hold a public vote.

The Commission’s research suggests local authorities should retain 100 percent of the business rates they collect, and calls for funding allocations that span several years to help councils in long-term planning.

Commission chair Darra Singh stresses council services in Britain are in crisis.

“Nowhere is this more evident than with adult social care, which is facing financial crisis with minimal scope for further efficiencies,” he said.

Local government minister Kris Hopkins said there is scope for enhancing councils’ spending autonomy.

"There is certainly scope for decentralizing more funding to councils, by extending the successful introduction of incentives like local business rates retention and the New Homes Bonus,” he told the BBC.

Hopkins defended Britain’s council tax referendum system, insisting it has a lot of public support. He said councils should refrain from devising new methods to tax citizens and instead freeze current council tax rates.

Scotland’s independence referendum last September intensified calls for English devolution. As a result, increasing numbers of councilors and mayors across the UK are calling for more powers in the face of dwindling funding.