Councils make funding plea to Chancellor ahead of autumn statement

Councils “do not have enough funding simply to stand still” as they face billions in funding gaps across the next two years, the organisation representing them has told the Chancellor.

Increasing pressures on homelessness services, children’s social care and transport for children with special educational needs and disabilities (Send) are all areas which “cannot wait”, the Local Government Association (LGA) said.

The organisation, which represents councils in England, has written to Jeremy Hunt ahead of his autumn statement next month to say that despite additional funding announced in the past year “councils are still under intense financial pressure”.

LGA analysis after August’s inflation forecast from the Bank of England estimated funding gaps of £4 billion across the next two financial years, despite additional funding already announced by the Government.

The LGA submission said: “These gaps relate solely to the funding needed to maintain services at their current levels. The implication here is that councils do not have enough funding simply to stand still.”

It said some areas “require immediate support from Government” and called for a “broader set of actions to secure the long-term financial sustainability of the sector”.

The organisation highlighted particular problems amid squeezed budgets and a chronic housing shortage impacting its efforts to help record numbers of homeless people.

The LGA said there is “mounting pressure” to find suitable homes for “an ever-increasing number of people” but that councils are more often having to turn to alternative options such as hotels and B&Bs “at a significant cost”.

Figures published earlier this month by the Department for Levelling Up, Housing and Communities showed that £1.74 billion was spent on temporary accommodation including private sector accommodation leased by local authorities, hostels, refuges, and B&Bs in the year to March.

This was up by around 9% on the previous year’s figure of £1.59 billion.

Government statistics released in July showed that the numbers of households and children in temporary accommodation in England are at record highs.

Some 104,510 households were in temporary accommodation by the end of March – the highest number since records began 25 years ago.

The total number of children in this situation is also at the highest level since records for that measure began in 2004 – with 131,370 children living in temporary accommodation as of the end of March this year.

Government efforts to clear the backlog of older cases in the asylum system mean “increasing risks around destitution and rough sleeping numbers”, the LGA added, describing a continued “crisis across the refugee and asylum system”.

Darren Rodwell, LGA housing spokesperson, said: “Councils are under mounting pressure to find suitable homes for an ever-increasing number of people and are doing the best they can under current circumstances.

“A plethora of issues has meant that council budgets are being squeezed and the chronic shortage of suitable housing across the country means that councils are increasingly having to turn to alternative options for accommodation at a significant cost.

“Councils need to be given the powers and resources to build enough social homes for their residents so they can create a more prosperous place to live, with healthier and happier communities.”

In its submission to Mr Hunt, the LGA said councils have had to spend 13.6% more on children’s social care in this financial year compared with 2022/23 “with further upward pressure on in-year spend”.

It also highlighted “escalating costs” for school transport for Send children, saying such spending is up by nearly a quarter.

The LGA is asking the Chancellor to address “funding sufficiency and certainty issues faced by councils”, to take steps to strengthen the local government workforce, and to strengthen councils’ role in “key national policy areas such as housing and net zero”.

Separately, more than 100 councils are due to attend an emergency summit on Tuesday “to discuss the escalating social and financial crisis created by the unprecedented demand for temporary accommodation”.

It is expected a joint cross-party letter from councils to the Government will be sent urging “immediate action” ahead of the Autumn Statement.

A Government spokesperson said: “Local authorities have seen an increase in Core Spending Power of up to £5.1 billion or 9.4% in cash terms on 2022/23, with almost £60 billion available for local government in England.

“We are committed to reducing the need for temporary accommodation by preventing homelessness before it occurs in the first place, which is why we are providing councils with £1 billion through the Homelessness Prevention Grant over three years.

“We are also delivering a fairer private rented sector for tenants and landlords through the Renters Reform Bill which includes abolishing Section 21 ‘no fault’ evictions.”

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