Spending on planning and housing services falls by more than 50%

Overall council spending on planning and housing services in England has more than halved in the last 10 years, according to a new report.

The report by the Institute for Fiscal Studies claims spending on planning and development and housing services fell by more than 50% between 2009 and 2018, as local authorities in England found themselves under renewed pressure to deal with rising demand for social services and cuts to central government funding.

According to the report, overall spending on local services fell by 21% during the 10 years.

Spending on cultural and leisure services and highways and transport have also seen cuts of more than 40% over the same period.

The report also warns that any income local authorities receive from council tax and business rates is highly unlikely to keep pace with rising demands and costs for public services.

For example, the report states that even if council tax were to be increased by 4.7% a year every year, adult social care could account for more than half of revenues from these taxes by the mid 2030s.

It adds this would leave little in the way for other services, including children’s social care, public health and housing.

Instead, it argues that either voters will have to accept lower levels of service provision or that councils will have to be provided with additional funding.

This funding could be raised by central government or councils could be given more powers to set local income taxes.

‘Current plans for councils to rely on council tax and business rates for the vast bulk of their funding don’t look compatible with our expectations of what councils should provide,’ said report author, David Phillips.

‘A proper national debate on how much we are willing to pay and what we expect of councils is therefore needed. Without it, we will default to a situation where the services councils can provide are gradually eroded without an explicit decision being taken — until ad hoc funding is found as a response to political pressure. Such an approach would not be conducive to long-term planning by either councils or the government.’

The chief executive of Localis, Jonathan Werran commented: ‘If the choice has to be between central government handouts in support of top-down mandated Whitehall mediocrity or locally-raised revenues to support place-responsive public services, then it really is no choice at all.

‘Our democratically-elected local leaders must have fiscal powers to sustain local services and support local economies and communities as well as the security to strategize long-term,’ added Mr Werran.

‘Locking local government finance settlements into broader, ten-year cycles would account for the latter, with a transition towards fiscal devolution achieving the former. This would amount to the devolution of not only roles but also responsibilities, moving local government away from delivery and towards governance.’

The report — English council funding: what’s happened and what’s next? — is available here.

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