Local government finance in recent times seems to have become a morbidly fascinating topic.
And just as it has become more accessible to the public at large – check out the Special Interest Group of Municipal Authorities’s ‘find out how much your council’s funding has been cut’ online tool – the plausible explanations for the out-datedness and systemic underfunding are running thin.
If you’re not convinced on the latter, see the Government’s response to the Levelling Up, Housing and Communities Committee report on financial distress in local authorities.
Behind the ‘cash-strapped council’ headlines, there are several common themes – one being homelessness.
This crisis continues to escalate, with the latest published statutory data revealing households in temporary accommodation rose by 12% in 2023. While demand alone is placing pressure on council budgets, there is also some urgent recalibration needed.
Although increased in the Autumn Statement, the Local Housing Allowance rate remains limited to just £109 per week and is still linked to 2011 levels.
There is a desperate need for this to be updated to even begin to recover the actual costs councils bear. The District Councils’ Network (DCN) cited this as the single best thing Government can do to avert the immediate financial crisis many councils face.
Looking longer-term, the DCN also called for the creation of a new capital fund to incentivise councils to rapidly build or acquire new temporary accommodation and housing.
While accelerating much-needed housing, this invest-to-save proposal would unlock the ability for councils to add new homes and deliver long-term value for taxpayers by reducing the drain on public finances.
So, as our macro financial dilemma becomes more widely and better understood, so too should these potential and credible solutions.
Tracy Bingham is strategic director (corporate resources) at South Derbyshire DC
X – @TracyBingham151