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Government funding falls short of what is needed locally

by Sandra Issar

After a decade of severe cuts to Knowsley Council’s funding (50% in real terms) from central Government, the Government has again failed to provide sufficient funding to local Councils.

Councils are facing continuing demand for essential services, prices are rising fast, and the impact of the pandemic continues.

The Local Government Finance Settlement should be an opportunity for the Government to ensure those local authorities that have the greatest demand and needs are fairly funded. However, the funding that has recently been announced means that the cost of funding essential local services is being passed on to local residents.

The Government had announced that £1.6bn would be allocated to local Government nationally – and from this Knowsley has been allocated new funding of £7m. However, Knowsley Council’s latest financial strategy forecasts suggest that this new funding will all be needed to cover rising prices, growing demand, increased costs of care and inflationary pressures in 2022/23.  A further concern is that £4.3m of this funding is one-off grant funding in 2022/23 only – so it cannot be guaranteed for future years, which will put additional pressures on the Council’s budget in 2023/24 and beyond.

Michael Gove, Secretary of State for Housing, Communities and Local Government has now confirmed Conservative plans for Council Tax to increase by 3% per year – 9% over the next three years to cover the cost of Adult Social Care and other essential local services.

This announcement comes at the same time as an increase in mortgage payments for millions of people due to an interest rate rise and inflation rising by 5% too.

Cllr Graham Morgan, Leader of Knowsley Council, said

“We are continually lobbying the Government for fairer funding and ensuring that those areas that have greater needs are appropriately funded. Yet again, this has been ignored and we are once again having to look at how we can continue to provide the essential services our communities value and need. The Government’s answer is increasing Council Tax. Our answer is fairer funding to ensure our communities aren’t penalised further. This is something we will once again be picking up with the Government.”

Cllr Jayne Aston, Cabinet Member for Resources, added

“This is another bitter blow for us. Instead of looking at what different areas need, there is a broad brush approach across the country which simply isn’t good enough. Not only are we facing rising Council Tax rising, but National Insurance is also set to rise in April. Instead of helping those communities most in need, this Government seem intent on penalising them. Their decision making really hasn’t been thought through and given some of our residents have the lowest incomes they need to do all that they can to support them, not make them pay more in taxes and Council Tax.”