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Nottingham Labour

Years of underfunding are hurting local councils

Nottingham Labour have today (18 December) accepted the Section 114 Report issued to Nottingham City Council by the Chief Finance Officer – and agreed the next steps required to reach a balanced in-year budget.

This is a difficult day for Nottingham, but the elected members of the city are committed to working with Chief Finance Officer to provide a credible response to the Section 114, so that we can be part of the solution.

It is important to reflect on why we are in this situation. A Section 114 was issued because of increasing pressures in Adult and Children’s social care and Homelessness. 90% of the council’s in-year overspend is made up from these three areas:

  1. Caring for vulnerable frail elderly or people with profound disabilities in our Adult Care services;
  2. Providing care for children who for one reason or other cannot live with their birth families;
  3. And meeting the need of people who arrive at our doors without anywhere to live.

These are statutory duties we are expected to carry out but for which we are not provided with sufficient resources.

Such pressures could have been handled if the Tory government had not been underfunding local government for years.

Over the past ten years, we have received £100 million less each year in real terms than we did before 2013, representing a loss of a billion pounds. That is £694 less funding per resident each year. Councils cannot cope with an increase in demand coupled to a decrease in funding.

Persistent underfunding has left all councils struggling, and unable to have balanced in-year budgets. Bradford has a budget gap of over £70 million, Derbyshire £33 million, West Sussex over £45 million. Tory, Labour, Lib Dem or independent run: it doesn’t matter, all councils are facing crisis.

The latest Local Government Settlement does not provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year. Councils in England face a funding gap of £4 billion over the next two years and the latest announcement does not change the funding gap facing councils this year and next. The funding uplift announced by the Government assumes that all councils will increase their council tax bills by the maximum allowed in 2024/25 which means councils are again left facing the difficult choice about raising bills to bring in desperately needed funding. This will also leave hard working families to pick up the tab with higher council tax and local services cut to the bone.

Councils are facing a perfect storm of rising demand and costs – all following thirteen years of continued cuts to council finances.

We are now faced with picking up the pieces of years of broken Tory promises and the failure of successive Tory Prime Ministers to support communities across the UK.
They have let down the people of Nottingham and our country. The only thing that will save local governments from having to issue more and more section 114s is a Labour Government and proper financial support and funding for local authorities.