Derbyshire County Council is one of a growing number of councils at risk of being unable to balance their books. Recently, the Conservative-led county council was revealed to be facing a £46mn budget black hole and is considering a freeze on everything except statutory services. The council has already dipped deeply into its reserves which, as the Local Government Association (LGA) warns, “is not a solution to the long term financial pressures that councils face.”
Elsewhere in Central Bylines territory, other councils are also struggling. In 2018, Northamptonshire County Council was the first in two decades (and only the second ever) to declare itself effectively bankrupt. Stoke-on-Trent City Council is also known to be in difficulties, while Birmingham City Council has become the most high-profile local authority so far to issue a section 114 notice of effective bankruptcy.
It is highly likely that other councils in our region face similar problems. Unsurprisingly, they tend not to advertise their troubles until it becomes unavoidable. The Special Interest Group Of Municipal Authorities (SIGOMA) represents 47 urban authorities across England. It found that 10% of its members were considering issuing a Section 114 notice this year, while a further 20% said it could be possible in the next year.
Warnings from the LGA
Many have highlighted the swingeing cuts made to local government funding over the last decade. A recent report by The Institute of Government says the amount of money available for local authorities to spend from government grants, council tax and business rates fell in real terms by 17.5% between 2009-10 and 2019-20.
The LGA has calculated that councils in England face a funding gap of almost £3 billion over the next two years just to keep services standing still. Meanwhile, demand – particularly for social care – continues to rise.
Councillor Pete Marland, chair of the LGA resources board says: “The Government needs to come up with a long-term plan to sufficiently fund local services [..] so they can plan effectively, balance competing pressures across different service areas and maximise the impact of their spending.”
High Peak Green Party
Back in Derbyshire, the High Peak Greens have issued a statement, highlighting the party’s history of speaking up on this issue.
They point out that, as long ago as December 2015, the Green Party wrote to the Government to demand sufficient funding to protect services from further damaging cuts, warning that “without such action, there is a very real danger not just to cherished community services, but also to essential frontline services.” Green MP Caroline Lucas added “Enough is enough. The Government must [..] give local authorities the resources they need to deliver services to the people they work for.”
Questions need to be asked
However, central government cuts may not be the whole story. Gez Kinsella, councillor for Duffield and Belper South and Derbyshire County Council’s first Green member, says that questions need to be asked. “Why was it only a few months ago that the Council were bragging about the lowest council tax increase in the country, when it is now having to stop all non-essential spend? They’ve failed to be prudent, believing in their own party’s mismanagement of the economy, banking on a dramatic fall in inflation. This is an embarrassment for a Conservative-led administration that claims to be able to balance the books.”