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With the spending review completed and the annual financial settlements for local government across the UK done and dusted, we now know where budgets broadly stand, between now and 2020 and it’s taking local government expenditure to its lowest percentage of GDP since 1948.
The move to four year budgets in England will see significant further pain, on top of that already experienced, over the next couple of years, before a stabilisation in the latter years of that settlement. This of course optimistically assumes that there will not be a further recession during this period, high levels of house building will be achieved and the move to localise business rates will run smoothly and fairly.
There was a real feel of local government being at a crossroads around the LGA conference in Birmingham this week, particularly as the LGA launched its report into future financing to coincide with the start of the event. What it showed was that based on current projections there will be a £16.5b shortfall on council budgets by 2020.