The crisis in local government funding: Why now is the time for a referendum (Part 1)

There has been much political analysis in recent days over the ‘real’ reasons why I announced the Green administration’s plans for a social care referendum on a 4.75% council tax increase.

Opposition parties have tried to throw as much sand in the eyes of the public with a colourful array of false and misleading claims. I won’t dignify them further other than to say how unedifying it has been to see political leaders doing everything they can to avoid debating the genuine issues at hand: the huge financial pressures councils are under and the growing uncertainty over how social care can be provided into the future.

Let’s be clear, the reason I’ve proposed a referendum on a 4.75% tax rise for social care is because I think it’s the right thing to do. Let me now explain why in more detail.

In 2011 we made a commitment to publishing early drafts of council budgets to facilitate the consultation and engagement process. Every year so far the final budgets have changed for the better as a result of this process. It’s the right way to do things when we have to decide on the future of important services for our city. We did the same again this year and the feedback from the public, service users, advocacy groups and unions was clear. They were very concerned about the impact of budget cuts on the third sector and social care in particular. They’re not alone – the majority responding to the council’s budget questionnaire wanted funding to be maintained or increased for local services. Yet because of government cuts and growing demand for our services , we will have to spend £23m less for the coming 2014/15 financial year.

Why is social care under particular pressure? Well the number of people who need social care is growing. This includes those with physical and learning disabilities as well as the elderly. It’s no secret that as we are all living longer, the cost of social care is growing. Here’s a snapshot – looking at centenarians as just one of many examples – of how the ageing population is expected to grow in the coming years:

Growth of centenarians in the UK

 

Let’s bring that into the local context. Here are the ONS’ predictions for our city until 2021 along side the change in council funding from Government in a similar period:

 

Future population & council funding changes
Future population & council funding changes

 

Yes, the graph really does show over 85s increasing in number by 20%  and at the same time our government funding declining by 61%. This is why the cross-party Local Government Association has been doing increasingly detailed work on making clear the huge pressures councils face as austerity continues and pressures on services grows. This graph shows their predictions for unitary councils like Brighton & Hove:

 

LGA unitary funding forecast
LGA unitary council funding forecast

 

The gap between funding available and funding needed for existing services is incredibly stark: This is not for new or extra services – but just to keep things going. In local government circles this has been debated, with increasing angst, for some time. But it’s sadly the case that too little of this reality  has entered public debate.

Some have claimed that this is special pleading by the Greens but that’s simply not true. The Local Government Association has a cross-party consensus on the issue and their chairman, the Conservative Sir Merrick Cockell, has led the charge. Sir Merrick, also the former leader of Kensington & Chelsea Council has said:

“We are being pushed into a position where either things will fail or the system has to change … we can’t cope unless someone takes that big step … to change the way we operate … Vital services are being damaged because councils do not have a seat at the table to negotiate a fair deal for their communities.”

Similarly the Labour leader of Birmingham City Council, Sir Albert Bore has said:

“Birmingham faces a severe financial crisis. Politicians in Westminster are systematically dismantling services that maintain the very fabric of culture and community here.”

“These cuts will mean the end of local government as we know it … but that does not mean the end of local government. We now need to build the new local government that will replace it. We call on the government to make radical changes to the way local services are funded and provided.”

The Independent Mayor of Bristol, George Ferguson, has said:

“…every city in the UK is facing a massive budget challenge… It will not be without pain… No number of negative headlines will change the fundamentals: we [the city council] must balance our books…”

The Conservative leader of Devon County Council has said to local government ministers:

“The impact of [the] spending review has not been accurately portrayed… We cannot make these extra savings without reducing substantially the services we offer to the people of Devon.”

And the Labour Mayor of Liverpool Joe Anderson has said:

“I believe community cohesion is being seriously threatened by the lack of funding to our city and others. I believe that the so-called ‘summer-of-discontent’ will happen again if we do not address this issue.”

So the problems of funding cuts are real, are being expressed loudly by all parties and are already hurting local services across the land.

In part two I will look in more detail at the particular situation we find ourselves in Brighton & Hove and why I believe our proposal is the right way to proceed. UPDATE: Part two has now been published.

Meanwhile debate continues on Twitter under #bhbudget #brightondecides and #LetThePeopleDecide plus comment pieces have been published by Local Government Chronicle editor Emma Maier, The Guardian’s Simon Jenkins and others as well as lots of excellent blog posts.

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