Look out for higher than inflation Council Tax Hikes if, as expected, the Government shirks its responsibility to provide local councils with sufficient funding for vital social care and children’s services in the Local Government Funding Settlement due later this month.

Most people think that their Council Tax monies pay for the services they receive off their local councils. Not so.  For most councils the council tax they collect covers the cost of around 15% – 18% of what they spend. The rest comes in the form of grant funding through something called the Local Government Finance Settlement from central government and a small amount from charges.

Around this time each year local councils wait with bated breath to see what their grant allocation is for the coming year. Further consultation takes place with central government and the final settlement figure is confirmed usually around February in time for the annual budget debate at each council.

Since 2010 councils have seen their budgets cut by up to 40% whilst at the same time the call on the services they provide has risen at an alarming rate.

The body which represents local councils, the Local Government Association (LGA) has warned that councils are running out of money fast. Estimates show that there will be a massive £5.8 billion funding gap in just two years’ time.

The LGA submitted their demands to the Government ahead of the Autumn Budget .recently announced by the Chancellor to the House of Commons. Unfortunately these demands fell in the main on deaf ears as there was very little in the Chancellor’s statement which was relevant to local government.

In the field of education and school issues for instance there were just token gestures the impact of which will be limited to say the least. Perhaps the most disappointing aspect of the Chancellor’s budget speech was around what he didn’t say on the subject of social care.

So now the spotlight shifts towards the local Government Finance Settlement, due out this month (December). Having said that there is little hope that there will be anywhere enough to meet the increasing demands from an aging population and the uncertainties surrounding of the protracted Brexit negotiations are having on our stalled economy.

The Chancellor’s Autumn Budget has fallen short of the mark in providing the funding needed to plug the looming £5.8 billion funding gap. If, as expected the Finance Settlement for the coming financial year follows suit then council tax payers will be faced with the double whammy of service cuts and above inflation council tax increases the blame for which will invariably fall unfairly on local councils who, unlike the Government can’t kick their difficult financial decisions into the long grass. The national debt stood at £1.8tn at the end of October. So much for the target to sort this out by 2015!

The Local Government Association has warned that only with fairer funding and greater freedom from central government to take decisions over vital services in their area can local government generate economic growth, build homes, strengthen communities and protect vulnerable people in all parts of the country.