‘Local government stands on the precipice of financial disaster’
Coventry City Council has appealed to Michael Gove MP Secretary of State for Levelling Up, Housing and Communities, for help with the ‘devastating’ financial crisis.
The letter, signed by Cllr George Duggins (council leader) and Cllr Richard Brown (cabinet member for strategic finance & resources) says that local government stands on the precipice of financial disaster and Coventry is “facing the prospect of having to issue a Section 114”.
This would mean that no new expenditure is allowed, and only statutory services including safeguarding people will be permitted. Existing contracts and plans would however be honoured.
It highlights to Gove that since 2010, Coventry has received £120m less each year, resulting in a real terms cut in core spending of £678 per household. Cllr Brown argues this is a much bigger cut than the England average of £581.
Analysis revealed that Coventry was amongst the 30 worst-funded local authorities in the country in terms of core spending power, and the proposed one-off 3% increase in core spending is “nowhere near sufficient to meet inflationary pressures and cope with the rise in social care costs”.
Social care costs have spiralled resulting in the council spending almost 70% on social care, in comparison to 40% in 2011. Adults and Children’s social care together accounted for nearly £11m of the underlying overspend. Cllr Brown blamed the rising costs of external companies due to inflation and called for the government to step in.
He also said the Local Government Association has forecast that local authorities need an additional £3bn “to just stand still over the next two years” whilst Gove chose to give back £1.9bn to the Treasury department.
Cllr Duggins and Brown concluded its letter to Gove by asking him to visit the council to discuss measures.
“Whilst we believe that this situation can only be mitigated by long-term funding reform, in the short-term we are calling on your department to assist.
“We would welcome a discussion on potential measures to help – which could include an income mitigation fund, top ups for under- funded authorities like ours, or fairer funding in relation to social care and housing.
“We would urge you to come and visit us in Coventry – so we can explain our situation more fully and elaborate on the catastrophic impact that our funding shortage will have on services for some of our most vulnerable residents”.
