Councils’ £50bn black hole shows Brexit isn’t only doomsday for next PM - Carl Les

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THE leadership contest to elect the new Prime Minister has been dominated by one subject: Brexit.

That is understandable, with Brexit representing one of the biggest post-war political issues that the country has faced.

The unresolved issue of social care is fuelling a �51.8bn black hole in local government finances, says North Yorkshire County Council leader Carl Les in a hard-hitting intervention.

The unresolved issue of social care is fuelling a �51.8bn black hole in local government finances, says North Yorkshire County Council leader Carl Les in a hard-hitting intervention.

However, I would contend that there is another massive priority that prospective Prime Ministers should be pressed to give their views on – that is the funding of local government, including social care.

Last month, the County Councils Network (CCN) released a new report that should provide food for thought for any of the candidates who wish to run this country with its findings revealing the scale of the challenge ahead for every council in Yorkshire and across the country.

The headline figure, based on analysis from PricewaterhouseCoopers (PwC), is that councils face a £51.8bn funding black hole over the next six years. This is the difference between what local authorities will receive in funding between now and 2025, and what they will be required to spend on services because of rising costs and population increases.

Remember, this is on top of the significant savings those authorities have already made. Make no mistake, the scope for making more savings dwindles each year.

North Yorkshire County Council leader Carl Les has joined calls for action over social care.

North Yorkshire County Council leader Carl Les has joined calls for action over social care.

This funding gap must be filled; if not councils will be unable to balance their budgets. So how will we do this? Council tax is one answer, but yearly increases will be nowhere near enough – neither will drawing down reserves nor increasing charges for some services.

Therefore, we will be in the unpalatable position of having to set out further reductions in local services, with little money left over to support universal services such as school transport, youth and community services, or work on economic growth, road maintenance and infrastructure, while in the process undermining our post-Brexit economic growth opportunities and ability to build homes for the next generation. As the largest county in England, North Yorkshire is exposed to two significant financial pressures facing councils – rising demand for adult social care, and rising demand within children’s services. We are a large rural county, mixed with big urban and coastal towns, each with their own socio-economic issues.

As a result, we face not only huge demands in caring for an elderly and ageing population, but also from children requiring care.

But these increased numbers are only half the battle: costs of care have roughly doubled in the last 10 years as we swim against an increasingly tough tide. The 36 counties will need to spend £2.9bn more annually on adult social care in 2025 compared with a decade prior.

PwC’s analysis shows that it is England’s counties which are the most exposed to financial pressures. That is not to say that urban authorities do not have challenges – they do. However, counties on average receive less government grant and are more exposed to demand pressures of looking after vulnerable children and adults than unitary authorities.

Whilst a lot of this seems a doomsday scenario for local services, it is the reality we all face unless the new Government provides more funding for local authorities.

CCN’s chairman has warned that many well-run councils will be able to deliver only the most basic in local services; this is not overblown rhetoric. Should we manage to fill this funding gap, it will keep services only as they are now – standing still, rather than enhancing them.

This raises the question about what residents – and government – should expect from local councils. With many council tax payers feeling they are increasingly paying more for less, what is the vision for local services if no resource is forthcoming to fund them? We are ambitious to provide the strong services our communities deserve.

Whilst we have secured some concessions from the Government and we have a real champion for local services in Richmond MP Rishi Sunak, the Local Government Minister, there is a great deal of uncertainty as to what will come next.

Our new research should focus the mind of any leadership candidate who wants to run this country. Whilst Brexit understandably will be at the top of their agenda, the plight of underfunded local services – and the stark reality of what will happen in the future – should be near the top of their domestic “to do” list.

Carl Les is the children’s services and education spokesman for the County Councils Network and the Conservative leader of North Yorkshire County Council