Autumn Statement: Reaction round-up

A round-up of reaction from local government and beyond to the George Osborne's Autumn Statement.

LGA chair Cllr David Sparks said: "By next May, government funding for councils will be 40 per cent lower than it was in 2010. Behind these numbers we must not forget that it is individuals who have paid the price of funding reductions, whether it is through seeing their local library close, roads deteriorate or support for young people and families scaled back. Further reductions without radical reform will have a detrimental impact on people's quality of life."

Sir Steve Houghton CBE, chair of SIGOMA and leader of Barnsley Council said the "fundamental issues" with local government finance have not been addressed.

"SIGOMA is disappointed that this Government seems to have once again failed to recognise the needs of those councils representing poorer areas and the residents they support," he said.

"The investments outlined by the Chancellor, while welcome, will not help local authorities in these regions deliver vital services and protect those most in need. The Government must do more to support hard-pressed local authorities and recognise that local government funding needs to be fairer, with more emphasis placed on need in an area rather than initiatives which generally benefit more affluent councils."

Sir Albert Bore, Birmingham City Council.Sir Albert Bore, leader of Birmingham City Council, said: "This statement includes lots of pre-election announcements for projects across the country but does nothing to address the financial crisis facing our local services.

"There are no changes to next year's funding for local government, which will see cuts of over £100m in Birmingham alone. And there is now the threat that cuts will continue at the same pace for a further two years. The Government needs to wake up and realise the damage that is being done to local public services in this country before it is too late.

"That is why, despite these almost impossible pressures, I can announce that we will be increasing our spending on the safeguarding of children next year, in order to address the challenges identified through joint working with Lord Warner, the commissioner for children's safeguarding.

"The council is still in dialogue with the Government to fund this agenda and we don’t yet know what level of assistance will be provided. But today I am able to announce that we will identify an additional £19.9m for next year in addition to the £9m already put in place. These combined resources will meet the expected increase in needs and allow for the recruitment of more social workers."

"This is not, however, enough to meet the full cost of the improvement programme next year, and we continue to ask the Government to afford Birmingham's children the same level of importance as their other priorities.

"I therefore call upon the Chancellor to show the same commitment to vulnerable children and to match this additional spending - not just in Birmingham but across all the hard-pressed areas of the country that have seen the biggest cuts."

John Cridland, director-general of the Confederation of British Industry, said: "We welcome the continued commitment to deficit reduction, but real challenges lie ahead to reduce future public spending, and fresh thinking on public services will be essential."

But Gillian Fawcett, head of public sector at the Association of Certified Chartered Accountants, warned that most public services face "winters of discontent".

"While money is being pumped into vital health services and infrastructure, other services are being put out in the cold over the next five years," she said.       

"The outlook for public services is bleak. The public sector balance sheet for 2013 shows net liabilities of £1.6trn, but this excludes the state-owned banks. If Government was a company, it would be bankrupt."

Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, said: "The staggering pressure now upon public services, with continued budget reductions to come well beyond the end of this parliament, means they face increasing challenges to maintain delivery for taxpayers.

"When you add in the impact of the ring-fencing of some budgets, such as the NHS and the protection of pensioners, the significance of the cuts still to come for other areas of public spending could damage their ability to deliver.

"However, [the chancellor's] statement contained little recognition of this and no explanation from the Government about how public services will continue under such long-term pressures."

ImagePaul Dossett, head of local government at Grant Thornton UK, commented: "Recent national fiscal events have not been happy occasions for local government, and local authorities will not have been expecting 'jam tomorrow' from the last Autumn Statement of this parliament. It is clear that the sector will face further spending reductions during the next parliament, but we will need to wait until the Spending Review that follows the May 2015 general election to find out how much. The Chancellor noted that the public's satisfaction of local government services has increased during the current spending review period, but it remains to be seen how long this trend will continue.

"We believe that greater devolution to local government, including fiscal devolution, is critical to the sector's future sustainability."

Andrew Jepp, director of public sector at Zurich Municipal, said: "The big risk to local government is that as they reduce services, they expose themselves to new reputational, operational and financial risks in these areas. As belts are tightened and councils dig further into their reserves, impacts may also be felt on core services such as social care.

"In the medium term, over half of councils are in a weak financial position. To tackle the problem, local government has asked the Chancellor for more devolution in England, matching the proposals made for Scotland by the Smith Commission. While he said he would welcome other cities following Manchester's lead, the Chancellor's comments did little to address the radical reforms many local authority chiefs believe is necessary to counteract spending reductions."

Richard Threlfall, head of infrastructure, building and construction at KPMG, said the Chancellor had offered "warm words but nothing of substance" on devolution.

"Without a greater degree of control over local taxes, all talk of devolution, investing in our city regions and rebalancing the UK economy is just hot air," he said.

Commenting on the Chancellor's commitment to a full review of business rates, Cllr Claire Kober, chair of the LGA's Resources Board, said: "We need a system of local business taxation which is fit for the 21st century, which supports the areas in which companies operate and which helps, rather than hinders, business and the growth of our economy.

"We also need to ensure the business rates system gives local areas the freedom and the finance to invest in the infrastructure and the services upon which businesses rely. It will be vital that any changes do not have an adverse impact on local government funding or council investment that has been made on the basis of the current system.

"Councils could do much more to support small businesses if we were able to set rates and discounts locally. It will be crucial that Government's reform of business rates make this a truly local tax. The money which a business pays should be retained by local government to invest in vital local services, all of which help local businesses either directly or indirectly."

Peter Hogg, head of Government at EC Harris, commented: "Local government in particular needs to focus more than ever on self-generated revenue and, with that in mind, the vaunted review of business rates will be eagerly awaited. Councils will be wise to act quickly to look at how they can unlock growth-focused regeneration to quickly bring sustainable revenue on stream."

David Pearson, ADASS.Elsewhere, ADASS president David Pearson welcomed the extra £2bn a year for the NHS but warned that "putting additional resources into health while simultaneously reducing social care spending is a nonsense".

“Put simply, despite local government's commendable resolve to work closely with the NHS to support the increasing numbers of people who leave hospital every week, social care budgets have been neglected and starved of the vital funding they need in order to make sure that unsustainable pressure on accident and emergency and other hospital  services is relieved," he added.

"Spending on social care has been reduced by some 26 per cent in the past four years while the NHS has been relatively protected.

"Responding to the increasing numbers of people who have long-term illnesses, multiple conditions, or disability by investing in the NHS and ignoring the vital role of adult social services in providing essential care and support makes little sense. Social care is vital if we are to avoid inappropriate, expensive, hospital care."