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Conservative council leader tells ITV News: We need more government cash to avoid financial disaster

A Tory council leader has told ITV News that the government must provide more money to cash-strapped local authorities like his to avert financial ruin.

As the funding crisis faced by local governments is laid bare in a new report by Parliament's spending watchdog, Lancashire County Council chief Geoff Driver said the rapidly rise cost of caring for the elderly and the most vulnerable children - combined with eight years' worth of central government cuts - was pushing his council to the brink.

Mr Driver revealed that he was having to routinely raid the council's cash reserves to maintain crucial services and to "lessen the pain" for residents.

"People have reserves for a rainy day - and it's raining," he told National Editor Allegra Stratton.

"You can’t keep doing that year after year with limited resources and indeed reducing resources.

"So the government is going to have to look and say we recognise a serious problem with adult social care, there is an equally serious problem with children’s services - we in local government are going to need some extra help."

Mr Driver's stark warning comes as the National Audit Office (NAO) predicted that one in 10 councils with social care obligations will have exhausted their reserves within just three years if the current rate of spending is maintained.

Increasing demand for social care is piling the pressure on councils. Credit: ITV News

While the NAO report does not identify individual councils, the Bureau for Investigative Journalism has found that Lancashire as well as Somerset and Norfolk are showing similar signs of financial stress as crisis-hit Northamptonshire, which was forced to put itself in special financial measures in February.

The Bureau also reported that 22 councils (of the 150 responsible for social care) had a drop of 50% or more in their usable reserves in the past five years.

With social care taking up 55% of councils' total budgets, local authorities have been forced to cut back on services such as buses, bin collections, road maintenance and libraries.

50%
funding cut by central government since 2010 - NAO
1 in 10
councils will run out of savings within three years based on current spending - NAO
55%
estimated percentage of council budgets spent on social care

Fulwood Library in Lancashire was re-opened after a public outcry. But with the county council needing to make drastic savings to reduce the £144 million deficit, non-frontline services like this could again be at risk.

"When they closed this place I cried - if they closed it again I'd do worse than cry," World War Two veteran Arthur Wilkinson, 85, said.

Paul Carter, the leader of Tory-run Kent council and head of the County Councils Network, said: "Eventually the elastic will break.

"We've delivered extraordinary efficiencies and helped the public funds of this country with tens of billions of pounds worth of savings over the past eight years but there comes a breaking point from where we can go no further without having flat cash or growth in resource."

Arthur, 85, who relies on his local library. Credit: ITV News

A government spokesperson said: “Last month, Parliament approved a funding settlement which strikes a balance between relieving growing pressure on local government and ensuring hard-pressed taxpayers do not face excessive bills.

"As part of this, we delivered a real terms increase in resources over the next two years, more freedom and fairness, and greater certainty to plan and secure value for money."

In response to the Bureau for Investigative Journalism's findings, a Norfolk County Council spokesman criticised what it called “scaremongering”, saying that it recently “set a balanced budget for 2018-19”.

It added that it was making savings, along with investing in key services and that the “2018-19 Budget also sets out a lower reliance on the use of reserves compared to previous years”.

A spokesperson for Somerset County Council said: “The figures quoted overstate the position and don’t take account…[of] our considerable contingency funds or the plans we have in place make savings.

“These are very challenging financial times for all local authorities and the Government has to look at the fundamental issues that lie behind this. It’s fairer funding review has to help councils like ours meet the needs of vulnerable residents and a sustainable, nationwide approach to the funding of social care must be a top policy priority."

Angie Ridgwell, Chief Executive & Director of Resources (Interim) of Lancashire County Council, said: "The County Council's revenue budget has been supported in recent years by the reserves that have been available to the County Council and their value has therefore reduced.

"The value of the Council's uncommitted transitional reserve is forecast to be £130m (including the 2017/18 forecast underspend). Current forecasts indicate that there may be sufficient funds within the transitional reserve to support the identified budget gap in 2018/19 and 2019/20. However, further savings will need to be made and fully implemented by 2020/21, at the latest, to deliver a sustainable financial position going forward."

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