READING is to receive a below-inflationary increase in its grant from the government, placing additional pressure on the council to balance the books.
It is estimated that due to increased demand on adult and children’s social care, an extra £13m is needed.
Just before Christmas Michael Gove announced that most councils would see an increase of 6.5% in their core spending power for the next financial year. And he called on local authorities to use their reserves to fund services.
Reading is to receive among the lowest amounts – a 3% increase. Council leader Cllr Jason Brock said this is meaningless and insulting to Reading’s residents.
The decisions also make it likely that council tax bills will increase by the maximum permitted – 5% – to cover the rising costs due to increased demand for social care and inflationary pressures.
In all, Reading Borough Council will receive £36.2m, of which £2.7m is the Revenue Support Grant.
It will also receive an additional £33,600 under the affordable homes premium scheme. Between October 2022 and 2023, there were 927 new homes. Six of these were previously empty properties brought back into use and 591 were council tax Band D or lower. And there were 96 affordable homes created, with each attracting a £350 premium.
In a written statement to parliament announcing the grants, Michael Gove said: “This settlement makes available over £64 billion for local authorities in England, an increase of almost £4 billion or 6.5% in cash terms in Core Spending Power on 2023-24.
“This is a real-terms increase which demonstrates how the Government stands behind councils up and down the country.”
“Every council sees at least a 3% increase in Core Spending Power next year before any local decisions on council tax rates and makes available an increase of almost £4 billion on 2023-24, of which £2 billion is additional Government funding – £1 billion of this is for children’s and adult social care in 2024-25.”
He continued: “The Government notes that while local authority reserves are falling, they remain significantly higher than prior to the pandemic. We continue to encourage local authorities to consider, where possible, the use of their reserves to maintain services in the face of these pressures.”
And despite the grants meaning most councils will increase council tax by 5%, Mr Gove said: “The Government’s manifesto commits to continuing to protect local taxpayers from excessive council tax increases. This is an important local democratic check and balance to avoid the repeat seen under the last Labour Government, when council tax more than doubled.”
Cllr Brock said: “Unfortunately it comes as no surprise to see this Government continue to bury its head in the sand about the perilous state of Local Government finances and this week’s provisional settlement does nothing to alter that.
“While making great play of a so-called increase in what it calls ‘core spending power’ for local authorities, the Government is once more assuming a maximum increase in council tax within those figures.
“Instead of coming forward with realistic funding solutions, the Government is again pushing the burden onto local taxpayers at a time when many are already struggling.”
He added the figures were just a sticking plaster when it came to resolving issues facing local authority funding.
“In the face of high inflation – which, having peaked at 11%, is decimating council budgets – and an ongoing cost of living crisis, which means more people are turning to councils for support, presenting this as an increase is not only meaningless, but also hugely insulting to both wider population and everybody who works so hard to keep essential council services going through these difficult times,” he continued.
“Thirteen years after they took power, the sticking plaster approach of the Government continues. There is still no realistic plan to put social care on a sustainable footing, whether for children or adults. We estimate an additional £13 million in costs in Reading across these two sectors next year alone, with little or no recognition from Government other than expecting councils to levy a 2% adult social care precept – doing nothing to address the problems in the long term.”
Cllr Brock continued: “Over a decade of real-terms budget cuts mean preventative services have been cut to the bone. Combined with the increased demand for council services, the impact is now clear.
“For Reading, the so-called funding increase from national Government is the minimum 3%, which is well below inflation.
“While years of financial prudence mean Reading remains in a better position than many, the reality is that this settlement does nothing to address the fundamental challenges which threaten essential services across the country.”
This view was echoed by Cllr Rob White (Green Party, leader of the main opposition group).
He said: “The financial settlement for councils does not provide enough money to meet the severe pressures which have left Labour-run Reading Council warning of the serious challenges they face to set balanced budgets in future.
“Reading’s financial recovery plan has only managed a small recovery. The council still faces a large projected overspend of £3.7 million. Only 42% of savings are on track to be delivered. Reading’s children’s services are overspending by a whopping £7 million and have delivered none of their savings.
“This financial settlement from the government combined with Reading’s poor situation will leave local people to pick up the tab with higher council tax for lower public services.
“The Government urgently needs to get a grip on the financial crisis facing councils and come up with a plan to fund councils.
“Green Party councillors will continue to work hard to hold the Labour-run council to account and make sure it delivers for our communities despite these financial challenges.”
The Liberal Democrat group leader, Cllr James Moore, was also concerned about the figures.
“The provisional local government settlement for Reading is shockingly low in these times of continuing inflation,” the Tilehurst councillor told Reading Today.
“The Conservative government is in effect leaving the Council to pick up the pieces as the cost of living crisis bites – for example, providing temporary accommodation for the increasing numbers of Reading residents who have lost their homes.
“Costs are surging elsewhere too, such as in adult and children’s social care – services for the most vulnerable in our town. And it is Reading residents who will have to meet these costs through increased council tax.”
