Local councils might cut services despite government's massive spending boost
New budget changes bring unexpected troubles for local authorities despite biggest spending increase in two decades. Higher wages and insurance costs eat up extra funding for essential services
The think-tank Institute for Government says local services might get worse even after Rachel Reeves announced her big-spending budget plan. The new rules about wages and taxes are eating-up most of the extra money that was meant to help local councils
Higher costs for employers national insurance and an unexpected jump in minimum-wage rates are creating problems for town halls across the country. While the government promised £39bn more for public spending (the largest boost in about 20 years)‚ local authorities dont see much benefit from this cash-injection
The situation looks extra-hard for social care services. Stuart Hoddinott from the Institute points out that service quality might drop between 23/24 and 29/30 – despite all the new funding. About 60% of care workers will need higher pay when the new minimum-wage rules start next spring; this costs way more than the £600m social-care funding boost
- Eight councils went bankrupt since 18
- Four in ten might fail in next 5 years
- £1.2bn extra costs for adult care expected
- Only £600m new funding provided
The Institute for Fiscal Studies found some good news in healthcare: NHS work-rate started getting better before summer. Hospital tasks like tests and treatments went up faster than staff numbers‚ showing better results than during covid times. But Nick Davies warns that fixing public services needs more time – “the previous government left services in an appalling state“ [[Institute for Government programme director]]
