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Memo to the Chancellor: Don’t forget about local government

Chancellor budget

When Phillip Hammond delivers his Autumn Budget on Wednesday I hope the pressing needs of local government are at the front of his mind, because after seven long years of cuts, these are challenging times for councils up and down the country.

The Local Government Association (LGA) has made clear in its budget submission that with many local services facing significant funding gaps, it is vital that the Autumn Budget recognises that councils cannot continue without sufficient and sustainable resources.

That is clearly the case here in Birmingham, where the City Council has shouldered a disproportionate share of local government cuts since 2010. Almost £600 million has been cut from our budget in the last seven years and, by the end of this decade, nearly two-thirds of the revenue budget as it existed in 2010 will have been removed. Inevitably that has meant cuts to services and sadly job losses.

As leader of the UK’s largest local authority, I wrote to the Chancellor last week, highlighting a number of key issues for Birmingham City Council.

I urged the Chancellor to correct a historic error. The decision to recalculate the local government funding formula from 2016/17 onwards was of course a welcome one. Unfortunately the now acknowledged unfairness of the funding formula in 2014/15 and 2015/16 has cost the Council in the region of £100m per annum. That shortfall clearly impacts on the people of Birmingham and I have urged Mr Hammond to address the unfairness in the Autumn Budget.

For the last seven years Birmingham has suffered some of the highest cuts in the country, while demand for the services that protect many of the most vulnerable people has continued to grow.

This can clearly be seen by the growing crisis in social care. Like local authorities across the country, Birmingham faces significant budgetary pressures in social care and the LGA has warned that for every £1 of council tax collected by councils in 2019/20, almost 60p could be spent on caring for the elderly, vulnerable adults and children.

Clearly the social care council tax precept and the £2 billion announced for social care in the Spring Budget were welcome short-term solutions, but it is absolutely vital that the Autumn Budget sets out how the Government intends to address the social care crisis. There must be long-lasting reform and councils must be given the means to meet ever increasing demand.

Inevitably seven years of austerity has meant cuts to services and sadly job losses in Birmingham. In addition, our remaining workforce has suffered a 21 per cent real-terms cut in basic pay since 2010. So I would welcome any decision to finally lift the public sector pay cap for local government, however funding for local authorities must then increase accordingly to avoid yet another real-terms cut to our funding.

I also hope the Chancellor listens to growing calls for the Government to fund a nationwide programme of retro-fitting sprinklers in high-rise blocks.

This matter is of extreme importance to over 10,000 Birmingham residents living in 213 tower blocks who are understandably concerned following the Grenfell tragedy earlier this year.

The retrofitting of sprinklers in all high-rise social housing would make a vital difference to people’s safety and I hope the government heeds the lessons of past disasters and provides the funds for this vital work.

Wednesday’s Budget comes at a key time for local government and the LGA is right to assert that with the right funding and powers, councils can continue to lead their local areas whilst the Government is distracted by Brexit negotiations.

So when the Chancellor delivers his Autumn Budget on Wednesday I hope he listens to the case for local government.

We remain committed to taking a lead on housing, regeneration, job creation and more, but these are challenging times for local government and a failure to recognise that in the Autumn Budget will have serious consequences in our communities.