Spending announcement points towards the devolution of cuts

May 24, 2010

Local authorities will have to cut £1.2billion from this year’s budgets according to spending plans published today by the Chancellor, George Osborne.

Although ring-fencing will be removed from other grants, allowing local authorities greater freedom and flexibility in deciding how to spend their money, NLGN calculates that councils will still face a 15% cut to the funding they had been awarded, through Specific Grants and Area Based Grant, in the 2010/11 Local Government Grant Settlement in November.

Areas under threat from the cuts could include schemes to tackle youth crime, support early year childcare and tackle homelessness. Overall local government will shoulder over a sixth of the £6.2bn of cuts announced across government for 2010/11.

NLGN Acting Director Anna Turley said that whilst the scale of the cuts might come as little surprise to many in the local government sector, there will be considerable concern that already allocated spending plans would have to be revised:

“Whilst local government has been anticipating significant spending cuts since 2008, many councils would have expected their 2010/11 grant allocation to remain as they have budgeted rather than significantly amended downwards. The scale of cuts which the sector will have to implement before March next year is a colossal challenge and points towards local government facing a difficult Spending Review later on this year.”

“Moves towards reducing ring-fencing are welcome but there is a danger that today’s announcement gives with one hand and takes away with the other, without providing the range of freedoms that councils require to realise the full scope of potential efficiencies. Devolution should not merely become an excuse to delegate the responsibility of service cuts. The size of the budget reductions makes it even more vital that the Government continues with the Total Place project pilots. These have illustrated that far greater efficiencies can be unlocked without affecting frontline services by looking at the entire public spending across an area – including NHS and school spending – rather than just local authority spending.”


Explore More