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News Headlines

 

Greg Clark tells Local Government Association “take power now”

Communities Secretary Greg Clark has told councils they are on the brink of a once in lifetime opportunity to be masters of their own destiny.

Speaking at the Local Government Association annual conference in Harrogate, Mr Clark called on all cities, towns and counties to be ambitious in their proposals to take power and resources away from Whitehall.

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CIPFA Survey Show Most Councuil Reserves Allocated

A survey of local authority finance chiefs by CIPFA has found that almost all (94%) of councils said they have plans in place to use the reserves they have built up, with 40% saying they are increasing their reserves because of uncertainty over government policy on areas such as council tax support and localised business rates. CIPFA’s study found councils held around £19.8bn in reserves, of which £2.3bn had been set aside for schools or public health projects, and a further £13.8bn as earmarked reserves.

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New LGA Chair Calls for End to NHS Ringfence

The new Chairman of the LGA Cllr Gary Porter has called for the protection of NHS funding to be ended, describing it as ‘a bizarre policy’. Cllr Porter said he believes that £3bn of additional money earmarked for health should be put into adult social care to help people remain in their homes for longer and avoid hospital admissions. He said: ‘If we can stop people getting ill in the first place, it’s cheaper but somebody has to have the courage to say ‘No, we’re not going to spend it all on fixing people at the wrong end. We’re going to stop people getting broken at the start’. Porter, speaking on the eve of the LGA’s annual conference in Harrogate, said no one thought the NHS was providing value for money

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£3bn council cuts put vital services at risk

Care services for the elderly, bin collections and pothole repairs will be under threat next year as councils cope with a £3 billion budget cut, the Local Government Association has warned.

Councils are facing their biggest funding squeeze as their annual grant is cut by 12 per cent next year and a further 11 per cent the following year to meet George Osborne’s target to slash spending by £30 billion within two years.  

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'Damaging' business rates appeals system must change, warns LGA

Council leaders have called for an overhaul of the business rates appeals system, arguing it will undermine vital local services.

An appeal by Virgin Media to merge rates payments for its broadband fibre optic network to 68 councils could see local authorities having to refund £75m and lose future income.

The Local Government Association (LGA) said the case was one of many that councils could face unless the Government takes 'urgent action'.

In its submission to the Government's review of business rates, the LGA argued local authorities should be named as interested parties on appeals so that they have the opportunity to defend themselves.

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Care system at death’s door, says ex-minister

The NHS will not survive unless steps are taken to shore up the crisis-hit elderly care system for the long-term, Paul Burstow, the former care minister warns today. He said although spending has been given special protection constant cuts over the past five years to local council budgets that fund social care for elderly and disadvantaged people have left the system “shrivelled” and nothing more than a “crisis care service”. He cited research showing nine in 10 NHS chiefs feel social care is having a direct impact on health care and questioned whether the cap on lifetime care costs and more generous means tests, due to start in April 2016, would be introduced.

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Oversize lorries causing “bedlam” on rural roads

Lorries are bringing “bedlam” to villages because of a rise in the number of lorries attempting to use narrow country lanes, the LGA has warned. It is calling for councils to be given powers to issue fines to drivers caught flouting weight restrictions. Money collected from fines could be used to tackle a £12 billion backlog in the nation’s pothole repairs. LGA Transport spokesman, Cllr Peter Box, said: “There has been a spate of accidents involving lorry drivers driving irresponsibly and bringing bedlam to small rural communities – and action must be taken immediately to curb this. Councils are doing everything they can to help their residents, working with communities by organising lorry watch schemes. But they are trying to take action with one hand tied behind their back and urgently need tougher powers. If a community is being plagued by problems at an accident blackspot, councils should be able to respond to communities’ concerns by issuing fines to act as a deterrent. We would stress that most lorry drivers are reputable and drive responsibly. These powers would be targeted at the minority who do not follow the law. This is also about protecting the drivers’ safety as well as the safety of residents and other road users.”

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Minister Confirms DoLS Review to be Brought Forward

The Care Minister Alistair Burt has announced that he has asked the Law Commission to bring forward its work on draft legislation to address the burden of complying with deprivation of liberty safeguard rules. Mr Burt said he had asked the Law Commission to publish draft legislation by the end of 2016, rather than 2017 as originally planned. Mr Burt acknowledged this was ‘still a length of time’ but said the complexity of issues involved meant it should not be rushed. A Stockport MP said her council was spendimng £1.2m a year applying deprivation of liberty safeguards.

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Essex sees demand reduction as key to savings

Essex County Council has set out a three-year “invest to save” plan in order to ensure it can continue to provide public services while also balancing its budget.

Speaking to Public Finance as the authority published its out-turn report for 2014/15, cabinet member for finance John Spence said reducing demand was key to ensuring the long-term sustainability of the authority.

Since taking up the finance brief last September, Spence said he had focused on schemes that could cut spending – called “invest to maintain”, “invest to grow” and “invest to save” – in response to government funding reductions.

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Whitehall doesn’t know how well Payment by Results is working, says NAO

Neither the Treasury nor the Cabinet Office currently monitor how well payment-by-results schemes work, despite £15bn being spent through the contracts, the National Audit Office has said.

There are at least 52 PbR schemes currently operating including high-profile initiatives such as the Work Programme and the Troubled Families Programme.

The contracts are intended to incentivise firms taking on public services to innovate in areas such as getting people into work or improving children’s school attendance, as most payments are only made when targets are reached.

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Many over-65s in England 'rarely use public transport'

The public transport system is failing the oldest and most vulnerable in society in England, according to a new report. ‘The Future of Transport in an Ageing Society’ was compiled by think tank the International Longevity Centre-UK (ILC-UK) and charity Age UK. It says millions of older people are faced with travel problems with more than half of over-65s either never using public transport or using it less than once a month, despite being eligible for free bus travel. The report also claims it is the oldest, those in poor health and those living in rural areas who are let down the most by public transport.

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Meg Hillier elected chair of Public Accounts Committee

Hillier, who served as a Home Office minister from 2007 to 2010, emerged victorious from a contest with fellow Labour MPs Helen Goodman, David Hanson and Gisela Stuart.

In her candidate statement for the post, Hillier pledged to focus on proper accountability of local services, particularly in the NHS and education, and also proposed that the committee undertake more pre-legislative scrutiny of large projects on a value-for-money basis.

Speaking after the announcement, Hillier said she was "delighted to have the opportunity to continue to challenge the government and public service providers and to press for more efficient and effective services for users".

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Warning business rate reform should not 'undercut' council funding

The Government has been warned not to use the reform of business rates as an 'excuse' to reduce funding for local authorities.

Chief executive of the Chartered Institute of Public Finance and Accountancy, Rob Whiteman, warned a move to Consumer Price Index (CPI) to calculate rates ‘must not further reduce funding for local authorities whose budgets are already stretched’. ‘This should not be an excuse to undercut funding to local government by this amount.

‘Any such reform to the way business rate increases are calculated must ensure funding for councils remains fiscally neutral.’

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Roundtable of Council Finance Chiefs Proposes Pilots for Testing Reforms

The audit firm Grant Thornton has published its findings from a roundtable meeting of senior 34 local authority finance officers. The report argues that a more balanced relationship is needed between central and local government. In particular, delegates at the roundtable said a new funding model was required that provides local government with more autonomy, allowing it to take responsibility for ensuring its own financial stability, whilst addressing the dual needs of 'resource equalisation' and 'incentivising growth’. The report proposed a series of 3-year pilots which would allow different emerging models of finance reform to be tested.

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NAO Report Warns of Additional Care Act Costs

A report by the National Audit Office has warned that local authorities are at risk of a funding shortfall in implementing the Care Act, as a result of uncertainties about demand for support and problems in government costings estimates. The NAO said the Department of Health had implemented the Act well, noting it had consulted carefully and involved the sector significantly. However the report said DH’s estimates of the costs of the reforms and allocated funding could underestimate the demand for assessments and services for carers and councils may not have the resources to respond if demand exceeded expectations. According to the auditors there has been a 29% fall in the number of people receiving council-funded support from 2008-9 to 2013-14 a £1.1bn reduction in budgeted net spending on adult social care by councils from 2010-11 to 2014-15.

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Business tax 'could close 80,000 shops in two years'

More than 80,000 shops could close in the next two years without a drastic overhaul of business rates, ministers were warned yesterday. Changing shopping habits coupled with the growing tax burden means almost two out of three town centre shops could shut by 2017 with the loss of 800,000 jobs, the British Retail Consortium claimed.

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NAO New Burdens Reports Says DCLG Needs to Use Intelligence Better

A report by the National Audit Office on DCLG’s new burdens policy has found that the Department ‘needs to use intelligence from the new burdens regime better’ in order to understand the pressures affecting local authorities’ financial sustainability. Whilst many new burdens are small, the NAO said their cumulative impact could matter and should be considered when government sets local authority funding. The rport dound that DCLG had taken steps since November 2014 to improve its understanding of new burdens, but added ‘it will need to continue to do so, to feed this knowledge into the next spending review’.

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Councils ‘ignore potholes to boost funding’

Councils are letting pothole-strewn roads deteriorate in an attempt to claim funding, said the transport minister. A series of “perverse incentives” had been created in recent years that have allowed local authorities to “let standards slip so as to win more money”, Andrew Jones claimed as he unveiled a £578 million fund that will be allocated on councils’ ability to spend money wisely. This includes proving that upgraded roads remain pothole-free for as long as possible and sharing resources with neighbouring councils.

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Primary school pupil numbers soaring

The primary school population in England has continued to rise sharply, with 94,000 extra pupils this year, reaching the highest levels since the 1970s. The 2.1% increase in primary numbers is equivalent to six more pupils for every school. "Minority ethnic pupils made up 71% of the increase," says the Department for Education's school census report. The annual figures show there are now more super-sized primary schools. It will mean more funding demands to create extra places and pressure on places for families looking for schools

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Years more spending cuts to come, says OBR

Further cuts in government spending will be needed beyond this parliament in order to bring the national debt under control, the Office for Budget Responsibility (OBR) has warned.

In its annual report, the OBR said that without further spending cuts or tax rises, the national debt would only increase.

It said a permanent £20bn cut in annual public spending will be needed by 2020.

That would help bring the national debt down to 40% of GDP by 2064, it said.

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Care reforms 'face £50 million black hole'

Councils could find themselves forced to cut services due to a potential shortfall in funding for major changes to the social care system, the National Audit Office has warned. The LGA said the potential costs of the Care Act could lead to a £50 million black hole which will have knock-on effect on other local services. Cllr Izzi Seccombe, Chairman of the LGA's Community Wellbeing Board, said: "Councils are implementing the Care Act at a time when rising demand and escalating costs means that the adult social care system is already under immense stress. Unless the Government fully funds all new burdens brought in by the Care Act then vital reforms to improve care and support for the elderly and disabled could be jeopardised.”

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SCT and Treasurers' Societies Respond to ADASS Survey

The SCT has responded to the latest Association of Directors of Adult Social Services (ADASS) budget survey, supporting ADASS’ view that the Government's promised extra £8bn investment in the NHS could go to waste unless action is taken to reduce funding pressures on care services. The survey shows that in 2015/16 a further £1.1billion of savings on adult social care budgets are planned with cumulative savings over 5 years now amounting to £4.6 billion. In a joint statement the SCT together with the other local authority treasurers’ societies said: ‘As finance professionals we believe there is a strong business case to invest in adult social care and we urge the Government to commit to this investment in the forthcoming Spending Review’.

Press Release

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Budget surplus rules for 'normal times' to be confirmed

Chancellor George Osborne plans to push ahead with introducing a rule that will commit future governments to spending no more than they collect in revenue.
Mr Osborne will use his annual Mansion House speech later to outline his plan to limit governments to a balanced budget in "normal" times, defined as any time the economy is growing.

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Councils ‘may lose out’ from increase in bankruptcy threshold

A forthcoming hike in the bankruptcy threshold is likely to hit councils and housing associations hard, a leading accountancy firm has warned.

From October this year, creditors must be owed at least £5,000 before they can initiate bankruptcy. This is significantly up on the current level of £750.

Moore Stephens partner Michael Finch said: “These figures highlight the impact that the unexpected steep rise in the bankruptcy threshold is likely to have, with public sector bodies having a crucial tool for debt recovery taken away. Some are likely to be forced to write off a substantial number of small debts.

He warned that the change to the regulations could see some “serial debtors” start to view council tax debt in particular as optional if they know the local authority has only limited means to pursue them.

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Adult social care firms struggling for staff due to cuts

Adult social care firms are struggling to hire, retain and train staff as a result of cuts to council budgets, a survey of senior officials suggests.

Councils in England are facing a £1.1bn shortfall this year, on top of "almost unendurable" cuts since 2010, the Association of Directors of Adult Social Services has warned.

Freezing care provider fees to save money was no long sustainable, it said.

Ministers say extra money will help NHS and social care services work together.

The survey, which was completed by 147 directors of adult social services for councils in England, suggests that funding reductions to social care budgets have totalled £4.6bn since 2010 - a 31% overall reduction.

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OECD tells George Osborne to spread pain of public spending cuts

George Osborne should spread the pain of tough public spending cuts beyond the next two years, according to the OECD in a critique of the chancellor’s debt consolidation strategy.

The Paris-based thinktank said in its latest economic forecast that delaying some of the severe cuts planned by Osborne for the financial years 2015-16 and 2016-17 would “lower the impact on growth”.

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Chancellor announces £4½ billion of measures to bring down debt

Whitehall in-year budget review process completes, identifying further asset sales, underspends and efficiencies to smooth path of departmental savings. Making an early start on tackling the public finances in this Parliament, the Chancellor today announced £4½ billion of new measures which will bring down public debt this year, including a major boost to the Exchequer from completing the privatisation of the Royal Mail.

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Osborne reveals £230m spending cut for DCLG

George Osborne has revealed £230m will be cut from the Department for Communities and Local Government’s (DCLG) spending budget this year, as part of £3bn saving measures.

The chancellor today announced unprotected departments across Whitehall would be required to find average spending reductions of 3% this year, in what the Treasury is describing as a ‘significant first step’ toward finding further savings.

A total of £3bn will be saved from departments over 2015-16 though efficiencies, tighter budget controls to drive underspends and the pushing through of asset sales.

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2015