Councils warn of “battle to balance budgets”

In a letter to the Prime Minister, the Local Government Association is calling for Liz Truss to use any upcoming emergency budget to address the inflation cost pressures facing council budgets and follow through on her pledge to divert more funding for adult social care.

During her leadership campaign, Liz Truss has pledged to put billions of pounds earmarked for dealing with pressures in the NHS into social care.

The LGA letter – co-signed by LGA Chairman Cllr James Jamieson and the leaders of all four political groups at the LGA – said:

“Adult social care is already facing a funding gap for current services, increasing each year due to inflation and other costs. Without adequate funding, some councils will face a battle to balance budgets, worsening existing pressures and running the serious risk of impacts on the ability to deliver timely and quality care to those to those who need it.

“To address this shortfall, we agree that a greater proportion of national funding equivalent to that which would be raised by the health and care levy, which you have identified as £13 billion, should go directly towards social care upfront. This would reflect the urgency of the situation and help deal with these immediate pressures.”

The letter welcomes Liz Truss’s commitment to decentralisation and moving away from a system where Whitehall directs what happens in local communities across the country. Councils equally want to see a real transfer of powers and funding from Whitehall.

It also warns that energy prices, spiralling inflation, and National Living Wage pressures are set to add significantly increased costs to councils’ budgets

The LGA, which represents more than 350 councils across England and Wales, said:

“It is only by addressing this significant funding gap that councils can protect services, invest in local services and employ the necessary skilled and motivated workforce and deliver for our communities and level up all parts of the country. Alongside this, greater devolution of funding and powers will allow councils to fulfil their ambitions as leaders of place.”