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News Headlines

 

North-south school funding gap revealed

A report by the Institute for Public Policy Research (IPPR) has found that secondary schools in London receive on average £1,300 more per pupil than in the north of England, despite high levels of disadvantage in the north. The national funding formula for schools is currently under review, and the report calls for this to address the gap to avoid having a negative impact on the Northern Powerhouse. It is also highlighted that the “early years gap” between children from poorer and wealthier families is almost twice as large in the north than in London, and attainment in northern secondary schools is a cause for concern. However, northern primary schools are performing well, with some local authorities achieving levels of attainment for disadvantaged children that rival London.

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Sport England unveils £250m plan to tackle inactivity

Sport England has pledged to spend £250m over the next five years to help tackle inactivity.

It has published its five-year strategy today, which will include greater focus on groups who typically do less activity such as women, disabled people and those on low incomes.

Sport England will also set up a new fund for family based activities, and will partner up with 10 places in England to pilot new ways of working locally.

Chief executive of Sport England, Jennie Price, said: ‘In the next four years we’re going to dedicate more time, expertise and over £250m to tackling inactivity. We will be the single largest national investor in projects for people to whom sport and physical activity is a distant thought, or not even on their radar.

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LGA: Power over buses should be given to all councils

The proposed bus services bill unveiled in yesterday's Queen's Speech will limit powers to franchise services to areas with directly elected mayors.

But the Local Government Association (LGA) says giving such powers to all local authoritiies will help them deal with big predicted increases in road traffic and provide better services.

Cllr Peter Box, LGA transport spokesman, said bus subsidies should also be devolved to councils.

He said giving councils control over the Bus Service Operators' Grant – a fuel duty rebate paid directly to bus operators by the Government – would help them support vital routes and the roll-out of smart ticketing.

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Other Headlines

England's traffic volumes pass pre-recession peak

New statistics published by the Department for Transport (DfT) estimate that 271.1 billion vehicle miles were driven on the country’s roads in 2015, exceeding the previous peak of 269.9 billion vehicle miles in 2007.

Traffic was shared broadly equally across the Strategic Road Network, local authority major roads, and local authority minor roads.

A total of 89.7 billion vehicle miles were travelled on Highways England’s motorways and 'A' roads, with 87.8 and 93.6 billion vehicle miles respectively on council major and minor roads.

However, despite carrying nearly a third of total traffic, Highways England’s 4,443 miles of road represents around 5% of the national total of 187,951 miles

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Council leaders call for urgent reform of business rates appeal system

As part of the Local Growth and Jobs Bill, announced in yesterday’s Queen’s Speech, local authorities will be able to retain 100% of their business rates income by 2020. Mayoral authorities will also have the power to raise additional funding for infrastructure.

The LGA said it welcomed the move, but has called for an ‘urgent’ reform of the business rates appeals system. It also wants any extra income received by councils should match any new responsibilities or transferred grants they agree to take on.

Cllr Claire Kober, the LGA’s resources portfolio holder, said: ‘Almost 900,000 businesses have challenged their business rates bill since 2010. Councils have been forced to divert at least £1.75bn from stretched local services in the past three years to cover the risk of these appeals and backdated refunds - of which they have to cover half the cost of at present.

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Crisis-hit care homes leave thousands of beds empty

More than 7,000 beds in care homes were deregistered last year, compared to just 3,000 new beds becoming available, representing the largest net loss for a decade. The figures were compiled by business analysts Laing and Buisson, who warned that local authorities would struggle to find places for elderly people in their care as the prices paid for places by councils did not cover costs, particularly following the introduction of the National Living Wage.

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£821m spent on supply teachers last year

Analysis by BBC News shows the equivalent of £168 was spent on each child in order to hire in extra staff to cover vacancies and absences.

Teachers unions say the amount of money spent reflects a "serious teacher recruitment and retention crisis".

The government said the number of quality teachers was at a record high.

The latest data for schools in England shows spending on supply teachers accounted for 6% of the total amount spent on teaching staff wages. The overall figure spent on supply teachers fell by £18m on the previous year.

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Older pensioners more likely to be living in poverty, warns charity

A new report from Independent Age has examined the income disparities between different groups of pensioners. It found that those aged over 75 were more likely to live in persistent poverty than younger pensioners, with 950,000 people living in poverty.

Of these pensioners, an estimated three quarters of a million over 75s are failing to clam the Pension Credit they are entitled to.

‘It would be foolish to assume that inequality simply ceases to exist at retirement age, but that is exactly what some of the recent rhetoric around "intergenerational unfairness" does. The Silent Generation of older pensioners, renters and single women have missed out on many of the gains of recent years.’

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Universities and councils to collaborate in local growth pilots

Pilots of the Leading Places Project, which are funded by £48,000 from the Higher Education Funding Council for England, will see university vice chancellors and council chief executives and leaders meet and agree on local priorities.

The Local Government Association will also work with the pilots and evaluate their performance.

Mark Hawthorne, chair of the LGA’s people and places board and leader of Gloucestershire County Council, said cooperating with universities will give councils access to greater expertise and research opportunities.

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Plea for funding to cope with child refugees

Council leaders, children's services and foster carer networks have called on the Government to properly resource local authorities to cope with a rise in unaccompanied child asylum seekers entering Britain. A national dispersal scheme will go ahead by July 1, but the Home Office has yet to provide details on how it will work. Cllr David Simmonds, Chairman of the LGA's Asylum, Refugee and Migration Task Group, warned existing funding is also inadequate to meet the needs of often traumatised children. He said: "It's simple. We know it costs £50,000 on average a year to support a child in care. We want to make sure children are properly supported, with foster carers and schools. Britain will cope. But the more children that come and the sooner they come, the more money is necessary." Dave Hill, President of the Association of Directors of Children's Services, has told Government "we need to get our skates on" to finalise the details while the Fostering Network said, despite cuts affecting foster carers, taking in more child refugees can be a "manageable challenge" if the scheme is run properly.

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Academy future for all schools still probable, says think-tank

Examining last week’s revision to the government’s plan, CentreForum said that, although the government would not force all local authority maintained schools to become academies, there were other policies that were likely to lead to full academisation.

These include: the continuation of the converter academies programme, where high-performing schools submit applications to become academies, often joining multi-academy trusts; and powers in the Education and Adoption Act to tackle underperformance. In the past month, the Department for Education said, it had issued over 100 academy orders to schools rated as inadequate.

The third route of forced academisation for all schools includes three elements. While education secretary Nicky Morgan has said that ministers will not force individual schools to convert regardless of circumstances, other powers in the government’s education white paper were likely to continue the trends, CentreForum stated.

These include powers to direct schools to become academies in underperforming local authority areas or where the council is judged not to have the capacity to maintain its schools because of previous conversions.

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Housing and Planning Bill set for Royal Assent

The Housing and Planning Bill cleared its final hurdle in Parliament yesterday as ministers rejected amendments to ensure councils can replace housing sold to fund the Right to Buy extension and peers were forced to give up their battle. Lord Kerslake, who was accused of trying to block a manifesto pledge by the Prime Minister, warned the House of Lords that the “sums simply do not add up” around the policy and that it would wipe out genuinely affordable homes. Peers inflicted 19 defeats on the Bill pushing it right up to the end of the Parliamentary year today.

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Bucks to consider single unitary council

Cabinet members yesterday approved a proposal to develop a business case to examine how local government could be reorganised for the benefit of the county’s residents and businesses.

The council says it will place high-quality, cost-effective services for residents and businesses across Buckinghamshire and a strong and accountable local leadership at the centre of its considerations.

Leader of the council, Martin Tett said: ‘The business case that cabinet has agreed today to develop will show how a single unitary council would streamline and simplify services for residents – something that is long overdue and that residents certainly tell us they want.

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County appoints experts to explore new models of local government

The accountancy firm will explore what new structure provides the best value for money while protecting frontline services, including a single unitary authority.

‘I am convinced local government needs to change in Oxfordshire, and it is vital that we make the right decision to protect council services for the future,’ said council leader, Ian Hudspeth.

‘The key issue for me is not about structures but more about how we can join up services efficiently to provide the best possible services for the people of Oxfordshire.’

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Government climbdown over forced academies plan in England

Plans to force all of England's schools to become academies are being abandoned in a government climbdown.

Education Secretary Nicky Morgan hopes the concessions will meet the demands of Tory rebels opposed to compelling high-performing schools to convert.

This was about the government listening, she said, adding ministers understood top schools should retain the choice on whether to convert.

The move comes days after threats of industrial action by head teachers.

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Councils 'should get foreign aid cash for taking in child refugees'

Britain's £12 billion foreign aid budget should be partly spent at home to help councils take in lone child refugees, MPs said yesterday. David Cameron dropped his opposition to the resettlement of unaccompanied children who have made their way into Europe. The Government is now facing calls to divert some of the foreign aid budget to local authorities and resettlement programmes in the UK. The LGA said each child in care costs around £50,000 a year.

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Alcohol consumption has increased in retirees, Government figures reveal

Public Health England’s (PHE) most recent data on alcohol consumption in the UK shows alcohol-specific hospital admissions in under 18s fell by 8.6% in 2014/15.

They also found the rate of alcohol-related admissions are falling in the under 40s for both males and females but rising in the over 65s for both genders, with rates being highest in the middle age range (40-64).

Hospital admissions for alcoholic liver disease continue to rise, and cancer incidences relating to alcohol have also seen a gradual upward trend in the past decade.

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Right to Buy extension to cost councils £26m a year

Whitehall’s flagship policy, a part of the Housing and Planning Bill, will force councils to sell some of their properties on the open market once they become vacant.

The housing charity Shelter estimates this will lead to 23,500 council homes being sold off across the country in just one year.

The cash subsequently raised by the sales would go towards funding discounts of up to £100,000 for housing association tenants taking up the Right to Buy.

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Labour blasts 'disgraceful' cuts to deprived councils

Labour has accused the Government of making the smallest budget cuts to councils in the constituencies of key cabinet members.

The analysis found Wokingham BC, Surrey CC and Windsor and Maidenhead RBC had seen the lowest budget cuts despite being the least deprived areas in the country.

These areas also cover the constituencies of home secretary Theresa May, health secretary Jeremy Hunt, leader of the House of Commons Chris Grayling, justice secretary Michael Gove and foreign secretary Philip Hammond.

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Research warns of 'grim' outlook for council spending

Councils may be unable to fund services such as parks, highways and refuse collections by the end of the decade, under concerns unveiled in a new report.

Research from APSE and NPI warns that by 2020, capital spending by local government will be at its lowest level since 1948.

The report, 'Sustainable local government finance and liveable local areas: Can we survive to 2020?’ reveals that council tax will account for at least half the money coming in to all English local authorities by 2020.

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Minister prepares to back track on academies plan

The Government could be preparing to back down on its plans to convert all council-run schools into academies.

According to newspaper reports, education secretary Nicky Morgan will allow some councils will be able to run their own multi-academy trusts.

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Local authority schools outperform academies, research suggests

The government’s plan to force all schools to become academies has come under further attack with research which suggests that council-maintained schools outperform academies at inspection.

Analysis by the Local Government Association (LGA) has found that 86% of local authority schools are rated good or outstanding by the schools watchdog, Ofsted, compared with 82% of academies and 79% of free schools.

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Doubling of free childcare 'could force nurseries to close'

Nearly 750 childcare providers say they fear being put out of business by government plans to double free hours, says the Pre-school Learning Alliance.

In 2017, free care for three-and four-year-olds will rise from 15 to 30 hours in each term-time week.

But childcare providers say the scheme is underfunded, and 49% of 1,500 who chose to respond to an online survey said they could be forced to close.

Ministers say many providers are keen to take part in the scheme. 

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PMQs: Cameron vows to 'finish the job' on academies

David Cameron has defended controversial plans to force all state schools in England to become academies, saying it is time to "finish the job".

During Prime Minister's Questions, Labour's Jeremy Corbyn cited opposition to the "top down reorganisation" from teachers, parents and some Tory MPs. He said good schools should not be distracted by "arbitrary changes".

Sources said the government was likely to guarantee no small rural schools would close as a result of the shakeup.

BBC political editor Laura Kuenssberg has been told ministers are having lots of conversations with Conservative MPs to tackle their concerns - but are not intending to back down on the policy.

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Four-year settlement unaffected by Budget, confirms Clark

Communities secretary Greg Clark has reassured the sector after concerns were raised that the planned £3.5bn cuts to public services would mean financial uncertainty for councils for the next few years.

Chair of the communities and local government committee, Clive Betts, said: ‘Following the move to 100% retention of business rates by 2020 and the multi-billion efficiency savings announced by the chancellor in his Budget, I’m pleased the secretary of state has confirmed that the four-year settlements for local councils are still valid.

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Councils seek power to expand class sizes ahead of academisation plan

Local authorities in England say they want new powers to provide classroom places if the Government presses ahead with plans to turn all schools into academies, as families wait to hear today if their preferred primary schools have room for their children. A Department for Education document showed that of 121 local authorities, 49 estimated that the proportion of preferences offered to families would be the same as last year while 40 said it was likely to be better. But a quarter of councils said the position was likely to be worse. The LGA said it was concerned councils were still legally responsible for ensuring all children were offered a school place, but that under the education White Paper they will have no powers to directly create places to meet shortages. Cllr Roy Perry, Chairman of the LGA’s Children and Young People Board said: “If proposals within the education White Paper go forward, and all schools convert to academies, councils must be given powers to force schools to expand where this is in the best interests of new and existing pupils. Most academies will be keen to work with their local authorities but in the minority of situations where this isn’t the case, appropriate powers are vital to ensure all children get a suitable place.”

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Foreign aid to overtake council funding

Foreign aid spending will overtake the amount of funding given to councils to collect bins, install street lights and run local services for the first time next year, official government figures show. Forecasts in the Treasury’s Budget book reveal that spending on international development will hit £9.3 billion in 2017/18 – overtaking local government spending of £8.2 billion that year. Tory MPs questioned whether at a time when councils are under “massive pressure” from cuts it was right to be spending “shedload of taxpayers’ money” on foreign aid. An LGA spokesman said: “The next few years will continue to be a challenge. While extra council tax flexibilities will help some councils offset some of the funding pressures they face, it will not prevent the need for further cutbacks to local services. Many will continue to have to make significant reductions to local services to plug funding gaps.”

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Councils face fines of £5,000 a day for abandoned roadworks

Councils and utility companies that leave roadworks with no repairs taking place during the weekend will be fined under a government crackdown. They face penalties of up to £5,000 a day amid warnings that unnecessary traffic restrictions place a huge burden on the economy. An estimated two million roadwork projects were taking place on A-roads each year, with drivers often stuck for hours in slow-moving traffic, the DfT said. Under the new measures, which will apply to all local A-roads in England, works by utility firms and councils must be carried out seven days a week or be lifted on Friday evenings. Temporary traffic lights must be taken down as soon as the work is completed. An LGA spokesman said: “Councils know how frustrating it is for motorists to be delayed by roadworks and are doing everything they can to minimise disruption. However, roadworks are often carried out to address issues which make motorists’ journeys easier — like mending potholes, of which there is a substantial backlog to be repaired.”

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Gap in funding between richest and poorest schools doubled in 20 years, IFS says

Over the past 20 years Government spending on schools in England has become increasingly focused on facilities with pupils from poorer backgrounds, according to the IFS.

In 2013/14, spending per pupil in the 20% of secondary schools with the poorest pupils (£7,400) was £1,800 more than spending per pupil in the richest 20% (£5,600).

This gap in funding, researchers from the Institute of Fiscal Studies say, is double what it was in the late 1990s. It is roughly 30% now as opposed to the 15% it was 20 years ago.

For primary schools this difference has grown from 10% to 25%.

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Town halls using parking charges to raise cash

Local authorities are collecting increasing amounts of revenue from parking charges, despite a court ruling forbidding the use of such charges as a form of taxation.

A Freedom of Information (FoI) request, submitted by the RAC, revealed councils’ revenues from residents’ parking schemes have seen ‘massive increases’ in recent years.

The FoI requests show the revenue collected ranges from a few thousand pounds a year to nearly £3m in the case of the London Borough of Lambeth.

In 2013, residents of the north London borough of Barnet successfully challenged their council’s sharp increase in parking permit charges from £40 to £100 and vouchers for visitors from £1 to £4.

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The road to self-sufficiency

By 2020 grants from Whitehall would have dried up, and councils will be forced to rely on the cash they can raise themselves. Traded services is one response to this tough, new world. In essence, it involves councils morphing into agile commercial actors and offering their services on the open market at competitive rates. This way, the argument goes, they will be able to generate their own income, becoming, in effect, public sector entrepreneurs.

Essex County Council is one such ‘entrepreneurial council’. I spoke to Jonathan Coyle, the director of the council’s Traded Development team, in order to learn more. ‘Traded services is the team that looks at opportunities for us to generate profitable revenue for the council,’ he explains, ‘and that profitable revenue is then reinvested into frontline services.’ This, he argues, can help councils balance their budgets.

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Local Council Tax support schemes: an independent review

On 2 December 2014 Marcus Jones MP announced the appointment of Eric Ollerenshaw OBE to lead an independent review into local Council Tax support schemes.

The review was charged with meeting the requirements set out in the Local Government Finance Act 2012, to look at whether the schemes are efficient, effective, fair and transparent, consider their impact on the localism agenda, and to make recommendations as to whether or not the schemes should be brought within Universal Credit.

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Cash for councils to fill almost 1 million potholes

Motorists and cyclists are set to benefit after the government announced how £50 million of funding will repair nearly 1 million potholes across the country over the next 12 months.

Over 100 councils in England will receive funding to help remove around 943,000 potholes from local roads during this financial year. The funding has been made available as part of the £250 million Pothole Action Fund included in last month’s Budget, which will fix over 4 million potholes by 2020/21.

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Highways maintenance funding: incentive element, 2016 to 2017

Information on the Local Highways Maintenance Incentive Fund. The documents include:

  • guidance and indicative allocations about the fund
  • the questionnaire used by authorities
  • details of the individual allocations of the incentive element for the Highways Maintenance Block for 2016/17

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£50m pothole fund denounced as 'complete madness'

The Department for Transport has published the breakdown for the first year of the £250m Pothole Action Fund, which will run from 2016/17 to 2020/21. It said this will allow councils to fix nearly 1 million potholes over the next year, based on a cost of £53 per pothole.

Some county councils will receive over £1m from the fund next year, with smaller councils receiving as little as £43,000.

Transport secretary Patrick McLoughlin said: ‘Almost every journey starts and ends on a local road, so the government is giving councils £250 million specifically to tackle the blight of potholes in their area.’

However, council leaders gave the announcement a lukewarm reception and called for ‘long-term and consistent funding’ to invest in resurfacing projects.

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Whitehall should invest '230 times' more to tackle potholes, says LGA

Whitehall announced today it will release £50m from the £250m Pothole Action Fund to repair up to one million holes over the next 12 months.

The money will go to 100 English councils.

The Local Government Association (LGA) warned, however, local authorities need much more to cover the billions it will cost to improve local infrastructure.

'While £50m is a step in the right direction,' Cllr Martin Tett, LGA Transport spokesman, said, 'councils need more than 230 times that amount to cover the £11.8bn cost to bring our roads up to scratch.'

He continued: 'The money announced today will help those councils receiving it to tackle potholes, but it would not even completely cover the cost of the £69m faced by the average authority to bring its roads up to a reasonable condition.'

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Right to buy amendment causes concern over forced sale of housing stock

Councils could be forced to sell their housing stock by the secretary of state, after changes were made to the wording of the Housing and Planning Bill.

Originally, councils would have been expected to sell their ‘high value’ properties to fund the extension of right to buy to housing association tenants. However, the wording has now been changed to ‘higher value,’ sparking fears that more homes would fall within the definition.

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Town halls receive funding to develop digital solutions

Councils receive hundreds of thousands of pounds in funding to support digital transformation schemes aimed at improving local services.

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South East to receive five times more funding than the North per head for flood defences

The south-east of England is to receive five times more money per head for flood defences in the coming years than parts of the north which suffered some of the worst damage during last winter’s series of storms, an analysis of Government figures has revealed.

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Winter floods cost councils £250m, says LGA

Almost £250m worth of damage to roads, bridges, public rights of way and drainage systems was caused by this winter's floods, a survey has found.

The Local Government Association's analysis warns of the cost to councils in England and Wales after Storms Desmond and Eva. It called for more financial help from the government as the cost was likely to be "much higher". The government says it has announced an extra £130m to repair infrastructure.

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Libraries lose a quarter of staff as hundreds close

Almost 8,000 jobs in UK libraries have disappeared in six years, about a quarter of the overall total, an investigation by the BBC has revealed.

Over the same period, some 15,500 volunteers have been recruited and 343 libraries have closed, leading to fears over the future of the profession.

Children's author Alan Gibbons said the public library service faced the "greatest crisis in its history".

The government said it funded the roll-out of wi-fi to help libraries adapt.

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Councils face £11.8bn bill to bring roads up to scratch

The total repair backlog on the local road network in England and Wales fell slightly in the last year, but still stands at £11.8bn according to the annual survey of local authorities.

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Greg Clark offers communities multi-billion pound offer to boost local growth

England’s 39 Local Enterprise Partnerships will be able to apply for a share of £1.8 billion to support projects in their areas.

Local leaders wanting to boost skills, support business and build more homes will be offered the chance to apply for the latest round of Growth Deals worth billions of pounds, Greg Clark said today (22 March 2016).

The Communities Secretary said the deals would boost the chances of areas securing significant inward investment from overseas – he will today chair an historic summit with Chinese regional leaders to highlight the opportunities available across the country.

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MPs approve Chancellor George Osborne's Budget

MPs have approved the Budget after Chancellor George Osborne was forced to shelve planned cuts to disability benefits.

The changes had led to a rift in the Tory Party and the resignation of Iain Duncan Smith from the cabinet.

Ahead of the vote, Mr Osborne defended his handling of the economy, but told MPs that where mistakes were made he was ready "to listen and learn".

The Budget was accepted by 310 votes to 275, a government majority of 35.

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Local government reacts to Budget 2016

Read LocalGov's round-up of local government's reaction to the Budget 2016 announcement here.

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Outgoing council chief executive says he 'longs' for the day council is scrapped

Issuing a statement as he prepares to leave the council, Mr Williams has called for the 'wholesale shake-up' of local government in Buckinghamshire and other areas that have yet to embraced a unitary arrangement.

Mr Williams said he recommended adopting a unitary model of local government for Buckinghamshire back in 2007, but at the last minute councillors decided not to back the plans. To this day he remains convinced that unitary councils 'work brilliantly' and can save million of pounds and reduce the duplication of services.

In a statement, he wrote: 'The two-tier system of local government made sense in 1974 when it was introduced, and even back then it replaced the equivalent of 15 existing councils down to the five we have today. But more than 40 years on, the two-tier system has become outdated, not fit for purpose and far too expensive to run. '

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'Black hole' in academy plan, claims Labour

Labour says it has identified a £560 million "black hole" in the Government's plan to force all schools in England to become academies. Labour calculates the cost of conversion per school comes to £44,837. On top of this, local authorities also incur legal costs and are also liable for schools' budget deficits when they convert to academy status. The Budget allocated £640 million over four years to be split between meeting the cost of full academisation and the funding of a new formula for schools in England.  But Labour said £500 million of this is earmarked for the new national funding formula leaving just £140 million for academisation. The Government said the figures were “way off the mark”. Cllr Roy Perry, Chairman of the LGA’s Children and Young People Board, said councils had "been forced to spend millions of pounds to cover the cost of schools becoming academies in recent years". He added: “With mixed evidence about academisation improving standards, and when public spending is facing significant cuts, imposing academisation on schools regardless of local opinion cannot be an appropriate use of public money.” The LGA’s response to the Budget plans for forced academisation were referenced on BBC Question Time last night.

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School parent governors to be scrapped

Unions have warned that parents will be sidelined from the running of schools after the Education White Paper announced that roles for parent governors will be abolished in favour of professionals with skills such as business or finance. Christine Blower, General Secretary of the National Union of Teachers, said: “Voices of parents, governors and the local community are being silenced by a government that does not believe in proper democratic accountability in our schools.” The Government’s announcement that all schools are to be turned into academies continued to raise concerns, with Hampshire County Council’s Executive Member for Education stating he was “horrified” that the council’s role in education was to be scrapped.

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IFS warns on dark outlook for public finances

In its annual review of the Budget, the Institute for Fiscal Studies warned the NHS and school budgets will face significant cuts – despite being ring-fenced – because they have a plug a “growing black hole” in the pensions of public sector workers. It comes as the Government will add an extra £2 billion a year to cost of “unfunded” public sector pensions. The IFS has also warned the Chancellor only has a 50/50 chance of balancing the nations books by 2020. A new tax on sugary drinks could actually increase the amount of sugar people consume as they switch to chocolate bars instead, it warned. It highlighted the fact that 17 per cent of added sugar in people’s diets comes from soft drinks and warned the levy could lead to a black market in sugary drinks.

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Going digital offers councils £14.7bn in savings

Councils could make as much £14.7bn in savings through greater digitisation of services, a review by the Public Service Transformation Network and the think-tank Nesta has found.

The Connected Councils report found that making local authorities and their services digital by default by 2025 would improve the delivery of services amid tightening budgets as well as significantly benefit local communities.

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Budget 2016: Services at risk as business rate cut reduces town hall revenue

Hundreds of thousands of small shops and firms will no longer have to pay business rates from April next year in a move that critics warn could lead to further cuts in local council services.

In a surprise move George Osborne announced that around 600,000 small firms will become exempt for local taxes altogether saving them each around £6,000 a year.

But with the £6.7bn revenues from such taxes now being devolved to councils some local authority leaders and charities warned the initiative could result in further public-sector spending cuts.

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Budget takes small firms out of business rates

This extension of relief is expected to lower revenues by over £1.5bn in 2017/18, and over £1.4bn in each of the next three years compared to previous forecasts.

In 2020/21, the year Osborne has pledged to localise revenues to local government, the chancellor announced that the annual indexation would move from the retail prices index measure of inflation to the lower consumer prices index, which is expected to reduce revenue by £370m.

Overall, the changes announced today are expected to reduce the business rates yield by around £1.95bn in the year that it is devolved to councils, according to the Red Book. The Budget documents says local authorities will be compensated for the loss of income as a result of the business rates changes, with the impact considered as part of the government’s consultation on the implementation of 100% business rate retention in the summer.

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Budget brings fresh cuts, both direct and indirect, for public services

The public sector is bracing itself for prolonged austerity as Osborne blames a worsening global economic backdrop and a “dangerous cocktail of risk” faced by the UK.

The decision to pursue further spending cuts also came as Osborne admitted he had missed a target for reducing government debt and as the Office for Budget Responsibility revised the UK’s growth down to 2.0% for 2016, down from 2.4% in the Autumn Statement.

“The OBR now tells us the world has become more uncertain,” the chancellor said. “So we have two options. We can ignore the latest information, and spend more than the country can afford. That’s precisely the mistake that was made a decade ago.

“Or we can live in the world as it is, and cut our cloth accordingly. I say we act now, so we don’t pay later.”

The savings will be achieved by a further “drive for efficiency and value for money” undertaken by chief secretary to the Treasury Greg Hands and paymaster general Matthew Hancock.

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