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LGA Outlines “Intense Financial Pressure” In letter to Chancellor

Despite welcoming additional funding announced in the 2022 Autumn Statement and 2023/24 Local Government Finance Settlement councils are still under intense financial pressure, with councils facing ongoing inflationary and pay pressures alongside spiking demand and market challenges in areas such as children’s social care and temporary accommodation the Local Government Association (LGA) has warned.

The Letter highlights recent spikes in inflation, the National Living Wage and energy costs have placed substantial pressure on council finances. Their analysis shows that by 2024/25 cost and demand pressures will have added £15 billion (28.6 per cent) to the cost of delivering council services since 2021/22. Local government received additional funding in 2023/24 and there is a commitment to a further uplift in 2024/25.

The letter adds that despite this the LGA estimated in July that councils were facing funding gaps of £2.0 billion in 2023/24 and £900 million in 2024/25. But following an updated inflation forecast from the Bank of England in August the analysis now shows funding gaps of £2.4 billion in 2023/24 and £1.6 billion in 2024/25. These gaps relate solely to the funding needed to maintain services at their current levels. The implication here is that councils do not have enough funding simply to stand still.

Welcoming the LGA submission, Professor Martin Green, chief executive of Care England, said: “Standing still is not an option for the adult social care sector. We need to move towards future-proofing our sector in light of growing demand and years of historic underfunding. At present, care providers are bearing the brunt of these implications. Although the call for the government to invest more money into local government is a simplistic one, it is the only answer to these mounting pressures.”

The number of people waiting for a care assessment, a care review of for their support or direct payment to start stood at over 430,000 as of March 2023, including over 80,000 people who have been waiting over six months with a 17% shift to unpaid carers between 2011 and 2021 being driven by people with high needs who would have in the past accessed care services.

In its letter, the LGA called on the government to ensure that all councils have sufficient funding to deliver their 2023/24 budgets, set balanced budgets for 2024/25 and develop medium-term financial strategies that are not characterised by substantial funding gaps.

The LGA also called for a “renewed focus on prevention to address existing and future demand for services such as social care, homelessness support and community safety”.

The letter can be seen here








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