Tough times ahead for local councils

By Tony Hudson

Local councils will have difficult times ahead if they do not adequately prepare for further hardship, according to a new report.

The Audit Commission review said local councils are facing cuts totalling £4.7 billion pounds this year, with more to come.

It also found over half of this year’s savings will come from housing, planning and cultural services. This will not provide the same savings on an annual basis and, as a result, councils will have to seek other methods of saving money if they are to avoid financial trouble.

Many councils are planning to reduce the quantity or frequency of some cultural services, tighten eligibility criteria in adult social care or reduce service standards in highways and transport in order to compensate for the future income shortfall.

Audit Commission Chairman Michael O'Higgins said that while "auditors believe that most will balance their books this year", councils should "prepare for a potentially rocky road ahead" with further deep cuts expected in the coming years.

The report also warned that councils would not find an adequate long term solution merely by dipping into their reserves.

"Money in reserves can only be spent once and cannot be considered a long-term solution to the unprecedented funding reductions councils are currently facing," said Sir Merrick Cockell, chairman of the Local Government Association (LGA).