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Council spending will have fallen by almost a third over the course of the last Parliament as a result of government funding reductions, public finance experts revealed today (20 July).
Analysis by the Chartered Institute of Public Finance and Accountancy (CIPFA) shows that since 2009-10 local authorities per capita spending in England will have decreased by 17.2% in cash terms by 2015-16. When adjusted for inflation this represents a drop of 32%.
It comes as new annual data, collected by CIPFA and the Department for Communities and Local Government, shows that housing is estimated to experience the biggest loss in its budget with a 9.9% reduction in spending since 2014-15 followed by planning and development down by 9.8%.
Other services to see annual falls in their spending include adult social care (-2%), education (-2.4%), cultural (-4.5%) and children’s social care (-0.4%).
In contrast, funding for highways and transport will increase by 2.2%, with much of this increase concentrated in Greater London and the South East.
On public health the figures show there has been a transfer of budgeted expenditure of 16.6% from NHS England to local authorities as councils get ready to take over public health commissioning responsibilities for children aged 0-5 from 1 October.
Apart from the South East (excluding Greater London), the figures also show a drop in all regional spending by local authorities compared to 2014-15.
The North East will see the biggest fall in budgeted expenditure of 4.9%, followed by Yorkshire and the Humber down 4.7% and the North West down by 3.2%.
Other areas to see falls in their expenditure include the South West (-3.3%), East of England (-2.7%), the West Midlands (-3.8%), East Midlands (-1.1%) and Greater London (-1%).
Rob Whiteman, Chief Executive of CIPFA, said:
“These figures will paint a worrying picture for many councils across England and hammer home how despite rising demand for front line services there has been little or no respite in funding reductions to local authority budgets.
“To survive in this tough economic climate it’s absolutely right for councils to have a rigorous focus on value for money and work more effectively with the wider public sector to deliver savings for taxpayers and better outcomes for local communities.
“That’s why we believe there needs to be substantial reforms to our systems of public financial management with greater alignment of local public services and for the government to budget for the medium to long term if public services are to be sustainable over the next decade.”
The annual figures follow a recent survey by CIPFA which showed that almost all of the financial reserves held by councils in England have been committed to specific investments or to manage future risk.
The survey showed that of £19.8bn reserves, £2.3bn had been set aside for schools or public health projects while a further £13.8bn had been earmarked for other areas of future local public spending.
Some 40% of councils said they were increasing their reserves because of uncertainty over government policy on areas such as council tax support and localised business rates.
Media requesting more information should contact CIPFA’s Press Office on 020 7543 5840/5830/5675.
These calculations are based on budgeted figures for 2015-16 taken from the CIPFA/DCLG Revenue Account Budget Estimates (RA) return. The actual expenditure figures may be different by the end of the financial year.
If not clearly stated figures are not adjusted for inflation.
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