A report by public spending watchdog the National Audit Office has highlighted how in addition to repeatedly raising council tax, local authorities are increasingly raiding their reserves to cope with growing demand on social services for vulnerable adults and children.
There is an undeniable link between the poor state of council finances and Government funding for local authorities falling by 50 per cent since April 2011 as part of austerity measures following the fallout from the global financial crisis.
Local councils across the country are finding that unpopular policies like cutting back on repairing roads, reducing bin collections and closing important community facilities like libraries are still not enough to balance the books; resulting in two-thirds of them dipping into their financial reserves in 2016/17.
Alarmingly, the NAO report suggests one in 10 councils with social care obligations will have exhausted those reserves within the next three years if the current rate of raiding the emergency coffers continues.
The ultimate impact of this has already been seen in Northamptonshire, where the county council’s parlous financial state has led it to effectively ban all new expenditure apart from statutory services for safeguarding vulnerable people.
A Government consultation on council budgets is due to close next week as it considers how to devise a new way of funding the operation of the services provided by local authorities. It is increasingly the current system is simply not fit for purpose.