The Deputy leader of Westmorland and Furness council has stated the tone of the budget announced by the new government is ‘encouraging’ but added ‘much more’ was needed to address budget gaps across local government.
Councillor Andrew Jarvis gave his response to the budget announced by the Chancellor of the Exchequer, Rachel Reeves, at a council meeting on November 4.
In the council meeting, councillor Doug Rathbone (Kendal South, Lib Dems) asked whether the budget addresses problems in local government finance.
In response Cllr Jarvis, who is also the cabinet member for finance, told the council chamber the tone of the budget was ‘much more encouraging’ than others in recent years.
Cllr Jarvis said: “The government do seem to be recognising the severe financial crisis in local government and their commitment to a multi-year settlement is positive.”
The budget announced on October 30 says core spending power for local government will increase by around 3.2 per cent in real terms in the next financial year, with at least £600 million new grant funding for social care.
Cllr Jarvis labelled the increase in funding ‘clearly welcome’ but stated this will address half of the estimated budget gaps across local government and ‘much more’ is needed.
In the budget the government announced an increase in national insurance payments for employers to 15 per cent. This came after the government pledged to raise the minimum wage to £12.21 per hour from April 2025.
Cllr Jarvis said: “I do though remain concerned about the increase in national insurance for employers, given the increase in the minimum wage, this could result in significant pressures for ourselves and for our suppliers including those in the care sector.”
Councillors were also informed that the authority will have approximately a £20 million deficit in the high needs block by the end of the financial year.
The high needs funding system supports provision for children and young people with special educational needs and disabilities (SEND).
Cllr Jarvis told councillors there is a ‘statutory override’ and this deficit is sitting off council balance sheets.
He added: “I would say many authorities though have a much larger problem, and for some of them it is an existential risk they face.”
In the budget the government announced a £1 billion uplift for SEND and alternate provision funding.
Cllr Jarvis said the additional funding ‘does not fix the problem’ and called on the government to come up with long term solutions rather than ‘stop-gap’ measures.
Report by Dan Hunt (Local Democracy Reporting Service)