Local council finances have long been undermined by austerity - Clive Betts

The difficulty for councils is that they are not just dealing with what is happening this year; they are also dealing with the problem of the year upon year of austerity that we have seen since 2010.

There is now a funding gap of £4bn, which £600 million goes nowhere near filling.

In fact, the Institute for Fiscal Studies said the other day that the gap was £7bn, but either way it is a much larger sum than the £600m that the Government has made available.

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Some councils have simply run out of money and have issued section 114 notices, while others are wary of what is coming.

Clive Betts is the Labour MP for Sheffield South East. PIC: UK Parliament/PAClive Betts is the Labour MP for Sheffield South East. PIC: UK Parliament/PA
Clive Betts is the Labour MP for Sheffield South East. PIC: UK Parliament/PA

They can see things getting worse rather than better because that is what has happened year on year, and, rightly, they are not rushing to spend all their reserves at once.

They are being prudent to a degree, but they can see those reserves running out in two or three years’ time, even if they are not facing section 114 notices immediately.

We have heard from the Local Government Association (LGA) that about 20 per cent of councils could be facing them in the next 12 months.

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It may not be as many as that, and everyone hopes it is not, but it could be a significant number.

In the last six years eight councils have issued section 114 notices, effectively declaring bankruptcy, whereas in the previous 18 years, none did so.

It is not only individual councils that are experiencing difficulties. The whole system is now broken.

Yes, individual councils have made mistakes, some of which have caused them to get into difficulties, but as we look forward, we see that it is not only the councils that make mistakes that will get into difficulties. Many will simply run out of money, and they will have no leeway to deal with any adverse consequences because their reserves will have been run down.

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In fact, for the most part, councils have done brilliantly to survive this long. Credit is due to councils and councillors throughout the country who have managed to keep themselves going, and managed to make efficiency savings on a scale of which any central Government Department would be proud.

My own city of Sheffield has experienced a 30 per cent cut in its spending power, and of course it has cut services.

Libraries have closed in my constituency, there has been less funding for tendered bus services, the grass is cut less often, and the planning department has fewer resources and wants more because of the number of planning applications being submitted for the redevelopment and regeneration of the city.

Those are all consequences of the spending cuts. This is about the two things coming together: the cuts to resources and the pressure from all the things that everyone talks about, including social care.

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In my view, councils are engaged in providing proper, decent and needed services for their communities, and there are not enough of those services because of the spending cuts.

I hope that in due course we can move forward to a better time for local government. Our councils deserve it and, even more importantly, our communities deserve it too.

An abridged version of a speech by Clive Betts, Labour MP for Sheffield South East, at a debate in the House of Commons.

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