Research reveals overwhelming disappointment (97 per cent) with the government's progress in delivering a sustainable local authority funding system.
The 2020 State of Local Government Finance report - conducted by Local Government information Unit (LGiU) and Municipal Journal - showed only 20 per cent of councils are confident this will be prioritised.
The eighth annual survey of councils across England found that nearly all councils (97 per cent) plan to increase council tax in 2020/21 to make ends meets, with 93 per cent planning to raise it by more than 1.5 per cent. Despite the increase, one in 10 councils is worried they will be able to fulfil their statutory duties.
As they await the outcome of the Fair Funding Review, 97 per cent of councils plan to increase fees and charges, with some being forced to raise them "by the maximum possible amount" (14 per cent). Nearly a quarter of councils (23 per cent) think these financial plans will lead to cuts noticeable to the public.
Children's services and education was the most immediate problem for council finances (36 per cent), followed by adult social care (24 per cent) and housing and homelessness (18 per cent).Adult social care was the top long-term pressure for (37 per cent), followed by children's services (21 per cent) and housing and homelessness (15 per cent).
To cope with immediate and long-term pressures, three-quarters of councils plan to increase their borrowing. More than half plan to use their reserves - 74 per cent did so last year. Additionally, 90 per cent of councils with social care responsibilities intend to use the social care precept in 2020/21.
The study also found that alternative funding models that had support include introducing a local share of income tax (46 per cent), having more freedom to levy other local taxes (40 per cent), a local share of the new digital tax (38 per cent), tourist tax (36 per cent) and a local share of corporation tax (31 per cent).
Two-thirds (66 per cent) think councils will be more reliant on income from commercial investments, and commercialising council services remains a popular income-generation option for two-thirds of them. Energy projects have moved up the list this year, with almost half of councils (47 per cent) considering this as a source of income, compared with 28 per cent in 2019/20.
Jonathan Carr-West, chief executive of LGiU, said: "The state of local government finances is dire... This isn't local government asking for more money. This is about a fundamentally flawed system that has been broken for years and the government continually refusing to acknowledge or engage in a proper solution. Sticking plasters will not solve these critical issues."
Councils' main worries
14% of councils predict an increase in judicial challenges to the level of service provision this year, with most in:
- Children's Services (including social care and school transport);
- Special educational needs and disabilities (SEND) provision;
- Planning;
- Libraries;
- Waste;
- Homelessness; and
- Adult social care
Services that may be reduced in the coming year:
- Business support (22 per cent of councils);
- Parks and leisure facilities (19 per cent); and
- Arts and culture (18 per cent).
Source: LGIU 2020 State of Local Government report
