Autumn Statement 2022: Councils face ‘more cuts, greater risk and financial uncertainty’

Support for Cambridgeshire’s most vulnerable people and communities is being put at risk as today’s Autumn Statement does little to alleviate the financial burden faced by local authorities, council leaders have said.

Cambridgeshire County Council is facing a significant financial gap over each of the next five years.

Its projected budget deficit for 2023/24 has doubled to £29m from its estimates at the start of the year.

This is due to the unprecedented rises in inflation, the costs of goods and services, and the economic downturn.

Council leader Cllr Lucy Nethsingha (Lib Dem, Newnham) warned of “more cuts, greater risk and financial uncertainty”.

She said: “Today’s budget – for that is what it is - does little to alleviate the issues that we and other councils across the UK are already facing.

“Despite promises of increased support for both education and social care, with no certainty of sufficient new money, it is clear that the Government’s intention is that we use their suggestion of raising council tax by five per cent to tackle some of the costs of the growing demand for our services.

“We remain concerned that this too falls on the shoulders of residents at a time when they are also struggling to afford to keep up with the cost of living.”

Currently, local councils must hold referendums if they want to increase council tax by more than three per cent, but the chancellor said today that he will raise this to five per cent.

Cllr Nethsingha added: “Once again, the government has failed to address the most fundamental issue, the need for a fairer funding review for local government, the lack of which continues to see Cambridgeshire being financially penalised. Having no longer-term certainty or funding settlement beyond the next 12 months further increases our risks at the same time as the demand for our services continues to escalate.”

Cllr Nethsingha reminded residents that Cambridgeshire has one of the lowest per capita funding levels in the country, adding: “We will have to absorb inflation without any real terms funding increase to do so. Cambridgeshire, along with other county councils is faced with unenviable decisions about cutting services at a time when they are needed most.

“We echo the views expressed by other councils, including both Hampshire and Kent County Councils earlier this week, in warning many councils risk bankruptcy without a clear long term funding solution.”

Deputy leader Cllr Elisa Meschini (Lab, King’s Hedges) added: “This is, once again, a deeply disappointing financial statement by the government. While we welcome the rise in the minimum wage, if the cost of this to organisations and businesses that provide us with service is not met by the government it actually represents a further cut.

“Cambridgeshire has already had to deal with year-on-year funding reductions in each of the last 12 years, this cannot continue. Census information published just this year showed that the East of England is growing faster than anywhere else in the country – and Cambridge City was in the top three areas in the country for growth, yet this will not feed into our funding allocation for several more years.”

“We are a net contributor to the UK economy and to the Treasury. The least we should expect is a commitment that funding will always increase to match growth, and as for the statement that the government is ‘recommitting’ to East West Rail – we’ve heard this before, and without funding it remains an empty promise.” she concluded.

Cllr Tom Sanderson (Ind, Huntingdon West), leader of the council’s Independent Group, added: “All in all this does very little to support hard pressed families and vulnerable people and does not provide the certainty or investment needed by councils to support and protect our communities.

Cllr Nethsingha continued: “Our expectation for this budget was that there would be clarity, certainty, and a plan from the government for financial stability for local authorities, particularly following the recent and continuing economic turmoil which we have had to cope with.

“Local government was and remains vital in supporting communities through a range of challenges, whether that was the Covid pandemic, the cost of living or climate crisis and in providing a welcoming and safe environment for people fleeing from Ukraine, or other war-torn areas.

“We were hoping for favourable changes to current local government settlements. Instead, we are once again faced with more cuts, greater risk and financial uncertainty.”

Cllr Anna Smith (Lab, Coleridge), leader of Cambridge City Council, said: “I want to echo the words of Baroness Sharon Taylor, the finance spokesperson for the District Council’s Network.

“The real-terms fall in council spending power, the ever-steepening rise of inflation and the escalating demands for services means that councils’ budget gaps will keep growing. Today’s budget does not help that.

“Every individual and every community will feel poorer as a result of this statement, as councils are forced to respond to the situation we find ourselves in.”

Leader of East Cambridgeshire District Council, Cllr Anna Bailey (Con, Downham) said she would do what she could to freeze the district council’s share of the council tax for another year.

She said: “Any increase to council tax just adds a huge additional burden to already stretched households and we will be doing everything we possibly can for our element council tax bills to freeze it.

“I recognise the circumstances households are facing, rising inflation, increasing household bills, we certainly do not want to be adding to that burden and we will do anything we can as a district council to freeze council tax bills, as modest a contribution that will be.”

Cllr Bailey said the district council had been planning to announce a council tax freeze for next year in October, but said this was delayed to wait until what was said in today’s statement.

She said “provided there are no nasty shocks” arising from the budget, she was confident the district council would be able to freeze its share of council tax for a 10th year.

Cllr Heather Williams, opposition leader at South Cambridgeshire District Council, said the council tax flexibility was not a “directive” to increase council tax.

Cllr Williams (Con, The Mordens) said: “It is giving authorities flexibility and choice, but the responsibility is still with that local authority – district council, county council – to determine what they believe is right for their residents. I think giving local authorities more flexibility is correct in this situation.

“The budget is not saying all councils need to put up council tax, every case needs to be looked at on own merits. The county council and others do have issues with adult social, they may have an identified, necessary need to do it, but if it is being done spending £100,000 new carpets then I do not agree it is necessary and needed.

“It is giving councils flexibility to react to the situation they find themselves in, no authority should see this as a green light to put council tax up unnecessarily to whatever they feel like.”

Additional reporting by Hannah Brown, Local Democracy Reporter.