Council finances are increasingly unsustainable and in need of reform, the public spending watchdog has warned today.
A National Audit Office (NAO) report into local government finances warned that town halls are becoming increasingly preoccupied with frontline services while preventative measures receive less cash.
The watchdog acknowledged funding available to councils had increased by 4% over the last decade to £55.7 billion.
That said, funding per person has seen a 1% decrease since 2015.
Demand for services like adult and child social care, temporary accommodation, and special educational needs and disabilities has increased beyond the amount of new cash made available.
The NAO report revealed people are finding it difficult to access local services, and once they do, their needs are not well met.
The watchdog recommended ministers develop a plan to reform funding and services so the financial and demand pressures councils are facing are addressed.
It also called on the Ministry of Housing, Communities, and Local Government to work with the Treasury on bolstering preventative programmes, to stop the most in-demand services being overwhelmed.
Looking ahead to the upcoming funding settlements, and the government’s planned reforms of local government, the NAO warns that short term measures to address acute funding shortfalls have not addressed the systemic weaknesses in the funding model, with a whole system overhaul required.
“There have been repeated delays to local government finance reform and Government can no longer resort to short-term solutions to support local authorities,” said Gareth Davies, head of the NAO.
“Action to address this must resolve the systemic weaknesses in local government financial sustainability through a comprehensive, cross-Government approach.”
Sir Geoffrey Clifton-Brown, chair of the Committee of Public Accounts, believes: “Short-term support is a sticking plaster to the underlying pressures facing local authorities. Delays in local audits are further undermining public confidence in local government finances.
“There needs to be a cross-government approach to local government finance reform, which must deliver effective accountability and value for money for taxpayers.”
But a Ministry for Housing, Communities and Local Government spokesperson insists: “This Government is under no illusions about the financial issues facing councils. That’s why we’re reforming the funding system and delivering improved public services across the country.
“We’re determined to make progress on the inheritance we’ve been left and are allocating £69 billion to council budgets across England, bringing forward the first multi-year funding settlement in a decade and reforming the local audit system to help drive forward our Plan for Change.”