NLGN gives reaction to budget

June 22, 2010

Responding to the Chancellor’s Budget Statement, Acting Director of the New Local Government Network Anna Turley said:

“This is the toughest budget for decades and lays out the scale of the task facing local government in balancing the books. The scale of the cuts poses a serious challenge to councils’ ability to deliver services that meet the expectations of citizens over the coming five years and beyond.”

I welcome the openness of the Government in being clear about the size of departmental spending cuts – 25% in real terms – but postponing the detail of how this will fall between departments until the Comprehensive Spending Review in October makes it extremely difficult for local authorities to plan for the future. The Government must be clear that local government plays a vital role in delivering crucial services across communities and should be a spending priority, rather than taking more than its fair share of the burden.”

This budget creates a burning platform for our local public services. They must be radically re-engineered in order to meet these savings without jeopardising front-line services. But local government cannot do this alone. If we are all in this together, local authorities will need greater flexibility from the centre and across other public services. This would enable it to cut out duplication and waste, and to respond better to the needs of individuals and communities.”

On Local Government Efficiency

The Budget does not mention the Total Place initiative, which opened up many of the avenues for savings and efficiencies that can be utilised to make the savings Whitehall requires, so we would like CLG and the Treasury to commit to ensuring that those lessons are not lost and that the potential of Total Place is taken forward across the public sector.

On Council Tax freeze

The Government must clarify quickly how the council tax incentive is to be administered and be sure that the compensation paid to participating local authorities continues to support lost revenue in the medium term. Otherwise this move is a further restriction of local financial autonomy in a time when greater freedom to raise money is required.

Local Economic Growth

NLGN welcomes the Government’s commitment to a review of Local Government Finance. We also look forward to the White Paper announced on incentivising local economic growth which will set out the future role of Local Enterprise Partnerships and introduce a new business rate incentive.

On Prudential borrowing

The ability to raise money for investment in a prudent manner is vital to local government’s freedom to invest for local communities. NLGN calls upon the Treasury to clarify the oblique reference in the Budget to “monitor lending from the Public Works Loans Board more closely” for reasons of risk. There is no indication that borrowing via the PWLB is inherently less transparent or risky than any other method open to local authorities, and a more restrictive framework could undermine opportunities for innovative and sustainable capital investment and enterprise.

Regional Investment

NLGN welcomes the Government’s commitment to support private sector enterprise and investment in regions that are particularly reliant on the public sector. These areas will face significant challenges as funding is reduced over the course of the next parliament. As part of this, we are glad to see that the Government is committed to progressing a number of key local and regional transport projects, and to introducing a Regional growth Fund to facilitate capital projects.


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