Jeremy Hunt's Autumn Statement leaves local governments facing 'difficult decisions'

Jeremy Hunt’s Autumn Statement has alleviated some of the pressure on struggling local authorities, although council officials have warned they still face “difficult decisions” and cuts to some services in the next two years. 

Addressing the House of Commons today, Hunt unveiled the government’s plan to “tackle the cost of living crisis and rebuild our economy”, including a combined £55bn in tax increases and spending cuts. He admitted that the UK economy was already in recession and added that things will get worse before they improve.

With inflation hitting a 41-year high of 11.1 per cent, local authorities across the UK have been battling to find an extra £2.4 billion this year, sounding alarm bells that severe cutbacks impacting the most vulnerable would have to be made without additional funding. 

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But the chancellor’s policy to give councils the power to increase tax by up to 5 per cent, including additional social care funds was welcome news, even if it ends up stretching households further.

Tim Oliver, the Conservative chairman of the County Councils Network said: “Reinvesting significant additional funding into frontline care services is strongly welcomed and will protect the most vulnerable in our society as well as buy councils vital time to stabilise the care system.”

The Local Government Association, which represents local authorities in England and Wales, also welcomed Hunt’s announcement. Its chairman, Conservative Councillor James Jamieson, said the financial outlook for councils is now better than feared. He added, though, that councils recognise “it will be residents and businesses who will be asked to pay more”.

Some were less enthused. General secretary of trade union Unison, Christina McAnea, said the government is acting like there’s no public sector pay or workforce crisis. “Super-high inflation means callous cutbacks are on the cards for essential services,” she said, “everyone’s paying the price for getting the Conservatives out of the mess they alone created.”

Councils will still face very difficult decisions over the next two years, particularly when it comes to non-care services. Data collected from 391 councils by trade union Unison found that vital services including waste collections, leisure centres and nurseries were already being cut in some local authorities in England, Scotland and Wales. 

The same analysis showed Birmingham City Council faced the biggest budget shortfall of £80m before Hunt’s announcement. 

Council leader and Labour councillor Ian Ward said that the new chancellor has made things even worse. He added: “This is a sticking plaster from a government that has run out of ideas and has decided to balance the budget by passing the buck onto local authorities across the country.”