Government’s continued failure to deal with the crisis in adult social care is at the heart of the councils funding crisis - Bill Carmichael

The good news for the citizens of Bradford is that their city council is not going bust thanks to an emergency injection of £220m of “exceptional financial support” agreed by the Westminster government.

The city will receive £80m in 2023-4, and a further £140m in 2024-25, allowing councillors this week to set a balanced budget and avoid effective bankruptcy in the form of what is known as a Section 114 notice.

But I am afraid the bad news far outweighs the good. Firstly, the money is a loan, not a grant, and will have to be paid back by council tax payers over something like 20 years. That is going to be a massive burden on an already cash-strapped city with high levels of deprivation.

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Secondly, council bosses said that despite the emergency bail out, they would still have to push ahead with £40m of planned cuts, closures of facilities and price rises, as well as a rise in council tax.

Bradford City Hall is the home of Bradford Council. PIC: Tony Johnson.Bradford City Hall is the home of Bradford Council. PIC: Tony Johnson.
Bradford City Hall is the home of Bradford Council. PIC: Tony Johnson.

Bradford will be forced to sell off council-owned assets, and it is likely that three waste recycling centres, and a children’s residential outdoors centre will close with the loss of more than 100 jobs.

So, in short the people of Bradford will be paying more, and getting less in return, in the decades to come. Hardly seems fair does it?

Bradford is not alone. Central government has been forced to bail out a total of 19 local authorities, including major cities such as Birmingham and Nottingham, with an extra £1.5bn of support.

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Bradford will receive the second highest amount of emergency funding given to any council, but even this hefty amount is dwarfed by the amount given to Birmingham - £1.2bn over two years.

It is not overstating the problems to say that local government in the UK is facing a huge crisis. So, it is timely to ask the question: what has gone wrong?

Well, some of the problems are self-inflicted. Bradford for example massively overspent on its children’s services, which were still rated as “inadequate” by Ofsted for putting young people in the city at risk of harm.

Things were so bad that the city council had to hand over management of children’s services to an independent trust last year.

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Elsewhere local authorities have been tempted into some risky commercial adventures, with often disastrous results. Nottingham City Council, for example, ran up losses of about £38m on an energy company that was forced to close in 2020.

Birmingham City Council overspent £80m on an IT system, and is facing equal pay claims amounting to £760m.

So councillors and officers have to shoulder some of the blame because of poor decision making and bad management.

But that is not the whole story, and ministers in London certainly had a role to play. For example many councils have seen cuts of more than 40 per cent in the Revenue Support Grant they receive from central government since 2010.

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This has hit particularly hard in areas of high deprivation, such as Bradford, because they receive comparatively less revenue from council tax and business rates than more prosperous areas.

At the same time councils have seen a big increase in demand for two vital services provided by local authorities - child protection and adult social care.

Bradford, for example, spends 87 per cent of its total budget on just those two services. These are what is known as “statutory” services - that is the council are required by law to provide them.

When so much of the budget is spent on these statutory services, it means that spending on “discretionary” services is squeezed.

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At the heart of the problem is a familiar issue - the government’s continued failure to deal with the crisis in adult social care. With an ageing population demands for social care have risen rapidly and will rise even more steeply in the coming years.

The care system is widely recognised as underfunded, inadequate, unfair and unsustainable and needs urgent reform. Back in 2011 the Dilnot Report, commissioned by David Cameron’s coalition government, recommended an overhaul of the funding model. But successive administrations have stalled on reform.

The reason is simple - fixing the system is going to be very expensive, and someone will have to pay, and that will be unpopular.

But we cannot kick this can down the road forever. Whichever party wins the next election fixing the adult social care system must be near the top of the government’s priorities.

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