SPECIAL INTEREST GROUP OF MUNICIPAL AUTHORITIES

Budget leaves councils in peril

Cllr Sir Stephen Houghton says many will highlight that cuts in local government spending mean the return of austerity – ‘but council leaders will know that it never went away’.

It had been briefed that the increase in overall public spending would reduce to 0.75% from the 1% set out in the Autumn Statement. While it is welcome that this did not happen, a 1% increase still means that ‘unprotected' departments such as local government face big real-terms cuts because the NHS and Defence will see increases above 1%.

The Institute for Fiscal Studies have estimated a cut of up to 3.5% per year, and the Office for Budget Responsibility analysis shows that local government spending is set to fall to 4.7%  of GDP in 2028-29, down from 5.1% in 2022-23 and from 7.4% in 2010-11. The Resolution Foundation have said that these cuts will be equivalent to almost three quarters (71%) of the cuts made during the first austerity parliament between 2010-11 to 2014-15.

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