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Councils’ spending will fall by 1.0% (£0.9bn) in 2016-17, calling into question their ability to maintain core services, figures published by the Department for Communities and Local Government and the Chartered Institute of Public Finance and Accountancy today reveal.
The most significant fall will be to the education budget* - 2.2% (£765m); cultural -5.8% (£145m); and fire and rescue services - 1.3% (£28m).
Children’s social care spending will increase by 1.8% (£0.136bn). Adult social care spending will also rise by 2.2% (£0.308bn).
Council reserves will stand at a total of £21.0bn, down 1.5% on the year before, with £17.3bn of these reserves earmarked for specific purposes. This includes a £2.3bn provision for schools, £174m for public health and £14.9bn for other areas of future local public spending.
Rob Whiteman, CIPFA CEO, said:
“Councils have taken a battering and the outlook only gets worse.
“Most people will welcome councils focussing more resources on support for the most vulnerable in society. However, the rise in adult social care spending shows that demand is inexorably rising as the population ages.
“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.
“CIPFA has developed an assessment method that will tell councils whether they are on track to balance their budgets. Crucially, it will also give the latest in best practice to ensure local authorities can overcome the future challenges.”
Regional spending by local authorities will also reduce in all areas of England, apart from Yorkshire and Humberside. Greater London will see the biggest fall of 3%, followed by the East Midlands (-2.7%), and the North East (-2.2%)
For media enquiries and data tables contact the CIPFA press office on 020 7543 5830/ 5787 / 5675 or email firstname.lastname@example.org.
These calculations are based on budgeted figures for 2016-17 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.
*A part of this reflects the shift of local authority schools to academy status rather than a direct loss of funding from the Department for Education.
The Chartered Institute of Public Finance and Accountancy (CIPFA) is one of the leading professional accountancy bodies in the UK and the only one which specialises in the public services. It is responsible for the education and training of professional accountants and for their regulation through the setting and monitoring of professional standards.
Uniquely among the professional accountancy bodies in the UK, CIPFA has responsibility for setting accounting standards for a significant part of the economy, namely local government. CIPFA’s members work (often at the most senior level) in the public service bodies, in the national audit agencies and major accountancy firms. They are respected throughout for their high technical and ethical standards and professional integrity. CIPFA also provides a range of high quality advisory, information and training and consultancy services to public service organisations. As such, CIPFA is the leading independent commentator on managing and accounting for public money.
More information on CIPFA’s financial resilience report
CIPFA’s financial resilience report will offer independent assurance to authorities to model and manage their funding and spending profiles to deliver a balanced budget.
The report is aimed as much at council CFOs who feel their council is reasonable well set to face the future as much as those councils who fear their financial resilience is under threat in the short term. In both cases, the informed professional insight at the core of the Advisory report, will provide independent and informed opinion on the position and the way forward.
More information on CIPFA’s FM model
CIPFA’s Financial Management (FM) Model is structured around these three themes of securing stewardship, supporting performance, and enabling transformation. Its scope ranges from the essential controls that should be in place to safeguard assets and demonstrate accountability, to the aspirations of top quality organisations. Its purpose is to help organisations to carry out a health check on their own FM fitness to deliver their goals, and to identify and plan improvements.