LAs : Financial Meltdown - Nationwide / Support Services CUTS

Discuss news stories and political issues that affect carers.
The crisis facing almost all LAs is deepening ... now forced to use reserves to pay for current expenditure.

We all know the scenario ... those monies we put away for a rainy day ... now needed as expenditure exceeds income.

Only , with LAs , the figures involved are somewhat frightening :


http://www.independent.co.uk/news/uk/po ... 74911.html


Councils forced to use emergency cash to pay for social care as funding shortfall grows.

Exclusive: More than half of local authorities due to overspend on social care this year with most set to make up shortfall through reserves.



Councils are being forced to spend billions of pounds of their emergency cash reserves on social care amid a significant funding shortfall, official documents reveal.

Analysis produced by the Office for Budget Responsibility (OBR) to accompany the Autumn Budget shows that English councils withdrew £1.4bn from emergency reserves last year.

They are forecast to have to draw down a further £1.7bn by 2020 – significantly more than the £0.9bn the OBR estimated in March.

Experts said relying on reserves to fund social care was “unsustainable” and “a crisis in the making”.

Local authorities face a huge funding shortfall in social care that is set to reach £2.5bn by 2020, according to the King’s Fund charity.

Because they have a legal duty to provide care to those who need it, councils have little choice but to find the cash to fund increasingly in-demand services or else risk breaking the law.

Many are therefore going significantly over their allocated budgets. More than half (53 per cent) of councils expect to overspend on adult social care this year, by an average of £21m.


Two-thirds of authorities that are currently overspending on social care plug the gap by utilising council reserves.

These funds are designed to safeguard councils from an event such as a recession and ensure they have enough resources to maintain services if circumstances change.

However, the funding gap in social care means many are being forced to use the funds to cover day-to-day spending, raising the prospect that they could be plunged into crisis in the face of an economic downturn or financial crisis.

Councils have seen their government funding cut by around 40 per cent since 2010, including 4.3 per cent in the last year alone.

In 2014, Eric Pickles, then the Communities Secretary, accused town halls of “pleading poverty” and told them to start spending the money set aside for a rainy day.

English councils currently have total reserves of around £23bn – down from £25bn two years ago.

However, MPs and local government leaders said the practice of using emergency funds to pay for regular spending was dangerous and “unsustainable”, as councils will eventually run out of cash.

Labour’s Clive Betts, chair of the Communities and Local Government Select Committee, told The Independent: “This is a matter of real concern.

“There was nothing in the Budget on social care. There is a crisis of funding for social care and drawing on reserves simply postpones the day the money runs out.

“This is not how councils should be funding social care. At some point the Government has to recognise this and put a proper funding regime in place.

“This is a crisis in the making. There’s a funding crisis in the here and now and this is just postponing the consequences.”

Mr Betts said the reliance on reserves also creates a postcode lottery because some councils have reserves they can draw on whereas others do not.

The OBR said councils are having to go over budget by more and more each year and rely increasingly on reserves.

Town halls have been overspending on children’s social services since 2010-11 and on adult social care since 2014-15.

Last year, councils in England overspent on their entire non-education budgets for the first time since the financial crisis, largely as a result of the cost of providing social care. Previously, under-spending elsewhere, such as on transport, made up for overspending on care services.

Amid growing concern over the funding shortfall, in March the Government announced a £2bn cash boost for social care. Town halls welcomed the increase but said it was not enough to meet demand.

Philip Hammond faced pressure, including from some senior Conservatives, to use his Autumn Budget to boost investment further. However, his Budget speech did not include a single mention of social care.

The Local Government Association (LGA) said using reserves to fund social care was “unsustainable”.

Councillor Izzi Seccombe, chairman of the LGA’s Community Wellbeing Board, said: “Adult social care services face a £2.3bn funding gap by 2020, including £1.3bn right now to stabilise the provider market. Councils are doing all they can to protect vital adult social care services that help people stay well and live independently in the community.

“Reserves are designed to help councils manage growing financial risks to local services. Using them to plug funding gaps is unsustainable and does nothing to address the systemic underfunding that they face.

“The reality is that the size of cuts councils are having to make and the growing demand for adult social care are simply too big to be plugged by reserves.

“It was hugely disappointing that there was no new funding announced for adult social care in the Autumn Budget. The Government needs to put this right in the local government finance settlement or else risk failing the ambition to support people’s independence and wellbeing with quality care and support.”

A Government spokesman said: “We are committed to making the social care sector sustainable which is why we have announced a cross-Government Green Paper on care and support for older people with input from a group of independent experts. We recognise that there is broad agreement across Parliament that reform for social care is a priority and look forward to hearing a range of views.

“The consultation builds on the additional £2bn over the next three years that we have already provided to meet social care needs, reduce pressures on NHS services and stabilise the social care provider market in the short term.”


THE PERFECT STORM

LAs running out of money.
Support services continuing to be cut.
What support services that remain out of reach as most carers cannot afford them.
Shortgage of affordable housing in all sectors.
Rents unaffordable in most areas without HB.
Benefit tenants facing not being able to renew BTL tenancies.
UC rollout sucking carers in through their carees.
Below inflation increases in some benefits.
Pressure on businesses to raise prices as profits decline.
Council tax rises sucking more monies from lower income earners.
Council tax arrears at record levels.
Food bank usuage increasing , starting to increase at a higher rate as UC arrives.
Illnesses / medical conditions not seen since Victorian times.
Growth down , and contining to decline.
Thousands of care home residents " At risk " as privately run homes close / change hands.

Just a few ... and it's now only a question of WHEN.

... and , when it does arrive , what of that now mythical safety net ?

What will be the reaction at street level ?

A stiff upper lip ???
As an ex-council employee, I have no sympathy with any council that hasn't slashed its levels of management by at least half.Then they need to look at actual productivity of individuals. There are still too many departments where people do the minimum.
Add in those gold plated pension schemes and ... even the smallest deficit tends to increase rather rapidly if growth slows ?

Traditional union agreements may be a factor here ... not as much as a couple of decades ago but ... worthy of consideration ?

Would any business hoping to survive and prosper be run the same way ?
We might be witnessing the first LA to declare itself insolvent ?


http://www.bbc.co.uk/news/uk-england-no ... e-42925660


Northamptonshire County Council 'warned it was unsustainable.'


The leader of a council forced to ban almost all spending said she warned the government the authority was about to "fall over the edge of the cliff".

Northamptonshire County Council said on Friday it had brought in a section 114 notice, banning new expenditure.

Heather Smith, Conservative council leader, said it was the "perfect storm" of increases in demand for services and reductions in government funding.

"We did warn that we would become unsustainable," she said.

She continued: "We have been warning government from about 2013/14 that, with our financial position, we couldn't cope with the levels of cuts we were facing.

"Before Christmas, I wrote to the secretary of state to say we were about to fall over the edge of the cliff because we can't just increase council tax.

"We've been in what you might call a perfect storm of huge increases in demand for our services at the same time as significant reductions in funding from central government."


'Austerity chaos'

A government spokesman said it had appointed an independent inspector to look at the council's finances, adding: "This is a decision for the authority, and it would not be appropriate for us to comment while the inspection is ongoing."

The council has insisted staff wages and spending on statutory services for protecting vulnerable people will be unaffected.

Philip Hollobone, Conservative MP for Kettering, said: "Just a few weeks ago the council was saying they could set a budget and it seems this announcement is more about the collapse of internal financial controls in the county council, which clearly are not adequate enough.

"The government may have to intervene rather more quickly than it perhaps intended to. It might have to send in commissioners to run the county council."

The council announced in December that it was looking to increase council tax by almost 5% as it sought to make savings of £34.3m.

It was then revealed in January it was considering selling its new £53m headquarters, which officially opened in October.

Last month, the government said an inspector would look into allegations of financial failings at the authority.

'Absolute bare minimum'


Speaking to Labour's local government conference in Nottingham, the party's leader Jeremy Corbyn said: "Austerity is unleashing chaos across our country, squeezing our local authorities and putting jobs, and the vital services they deliver, at risk."

Nick Golding, editor of the Local Government Chronicle, said as many as ten other councils could soon take measures similar to those implemented in Northamptonshire.


"Council spending power has fallen by almost half this decade; it's been a really, really difficult time for councils and there haven't been any sensible conversations about how you can provide the funding for social care and children's services, in particular, in the years to come," he said.

"No-one seems to be able to face up to the fact that the current local government finance system isn't working.

"The danger is that councils will only provide an absolute bare minimum in the years to come."

Analysis by Sam Read, BBC Radio Northampton's political reporter

Council staff are being paid which means libraries, schools and children's centres will stay open.

The council's leader has said she understands potholes will still be fixed as that is an existing contract that will be honoured.

But there will be no new deals, no new spending, on anything other than services legally required to keep vulnerable people safe.

While life continues for now, the seriousness of this move should not be underestimated - a warning like this has not been made at any authority for almost two decades.

It has serious long-term implications for the authority as councils have to balance the books by law.

In Northamptonshire there are two levels of council and so services like bin collections and car parks are the responsibility of separate borough and district councils that are not affected.

It is the first section 114 notice issued in about 20 years but Prof Tony Travers, from The London School of Economics, believes others could follow.

He said: "I think there are others that are quite close to Northamptonshire's position and, with so-called austerity continuing into the next decade, I would be amazed if Northamptonshire was the only council to get into these circumstances."

Bob Scott, leader of the Labour Group on Northamptonshire County Council, said: "My only surprise is that a section 114 order has been issued just after an inspector has been appointed and started his work."

The implications are due to be discussed at the full council meeting on 22 February.


That ticking time bomb ?

Nw running out of ticks before denotating.

Regular readers of the NEWS section will probably agree that the writing has been on the wall for years !!!
The Guardian finally catches up with me ?


https://www.theguardian.com/commentisfr ... -unfolding


The Guardian view on council spending: a crisis unfolding,

Editorial.

Eight years of savage cuts are driving local government and the services it provides to the brink of viability. Crisis management is no answer to this looming catastrophe.


More than it ought to be, council finance is a niche interest. But to those who take an interest, it was only a matter of time before eight years of spending cuts drove a council somewhere in England into the wall. That unwanted accolade has now been won by Northamptonshire county council, which revealed on Friday that it had run out of cash and was banning expenditure on all services except for its statutory obligations to safeguard vulnerable people. It has already made nearly £10m of cuts. Now libraries, bus services, even road gritting, will take another round of cuts.

At about the same time that Northamptonshire was declaring itself close to bankruptcy, Claire Kober, the Labour leader of Haringey council, announced her resignation. She had come under sustained local attack over her council’s plans to redevelop some of the borough’s social housing by outsourcing it to the controversial company LendLease. This metropolitan housing crisis is very different from Northamptonshire’s financial catastrophe; the political implications for Labour of its local government problems are in another category to the financial consequences for the Tory-controlled council 100 miles north. But at the heart of both is a single cause: the government’s vice-like grip on local government spending that drives councillors to take big risks that they perhaps do not fully understand, to sustain services in the face of a £5.8bn funding shortfall.


Northamptonshire bragged about its pioneering “easy-council” approach when it was introduced three years ago. The council outsourced every service it could, shedding all but 150 of its 4,000 staff. They were transferred to four new service providers, part-owned by the council but run like private companies, down to the payment of dividends.

It has not taken long to discover that private sector management can no more deliver adequate services on too little cash than the council can itself. By last autumn, it was running into trouble. A peer review by the Local Government Association concluded that “major shortfalls in achievement” were so serious that the council was relying on reserves to keep going. The review speculated that the Conservative-controlled council was hoping for a Whitehall bailout – not unreasonably, since Surrey county council had threatened a referendum on a 15% council tax rise to make up the shortfall in its social care budget – only to get emergency support in the form of “a gentleman’s agreement” that had been reached after direct intervention from the chancellor, Philip Hammond. Mr Hammond represents a Surrey constituency. But Northamptonshire lost out: instead, last month Sajid Javid, the communities secretary, announced an independent inquiry into the council, not least because it recently moved into a £53m new council HQ.

But Northamptonshire will not be the only council on the brink of bankruptcy. The crisis in public spending has become the overwhelming factor in domestic politics: as we report, hospitals are still cancelling operations; academy trust chains are getting emergency handouts just to stay afloat; social care has needed repeated extra cash. Defence is feeling the pain. At the end of last year, the Whitehall Monitor concluded that the government had institutionalised crisis management, doing nothing until the only option was an emergency cash injection. It is an insult to public services and the people who try to run them to expect them to function under this regime.


For me , first debated , at length , on CarerWatch close to a decade ago ... grim them even before the word AUSTERITY became a modern day buzzword.

One root cause is Council Tax ... a regressive form of taxation that bears no relationship to one's income over a very low figure.

Still , letting a few LAs go to the wall might be a blessing in disguise ?

What will then follow must be a better system than what went before ???
Regular readers will not have to look far for similar articles in today's media :


https://www.theguardian.com/society/201 ... l-disaster

Council tax rises on the way as local authorities try to stay afloat.

95% of councils in England could increase charges in April, while some will cut services.


Local authorities in England are teetering on the edge of a financial crisis, with most planning to increase council tax from April while continuing to cut services, a survey has found.

The annual finance survey from the Local Government Information Unit thinktank (LGIU) comes days after Northamptonshire county council became the first town hall in two decades to declare effective bankruptcy. Severe financial pressures had left the council unable deliver a workable budget.

The LGIU warned that the Northamptonshire crisis was potentially the “tip of the iceberg”, with four-fifths of councils concerned about their financial sustainability amid uncertainty over funding and the accelerating costs of social care.

“Councils are on the edge. They are, for the most part, holding services together – although a significant minority are not. But they can only do this by raising council tax, increasing charging and draining their reserves,” said Jonathan Carr-West, chief executive of the LGIU.

Lord Porter, the Conservative chair of the Local Government Association (LGA), said the survey showed some councils were being pushed “perilously close to the financial edge”, adding that many more would face huge challenges in setting budgets for the coming year.

“Extra council-tax-raising powers will helpfully give some councils the option to raise some extra income, but will not bring in enough to completely ease the financial pressure they face,” he said. “This means many councils face having to ask residents to pay more council tax while offering fewer services as a result.”


Local Tory MPs and Labour politicians have called for Northamptonshire to be taken over by government commissioners. The council forecasts a £21m overspend for the current year, and has warned that its finances will remain “grave” in the near future as it struggles to make £34m of cuts on top of the £376m made since 2010.

Earlier this week, ministers sought to head off a rebellion by backbench Tory MPs in shire areas by announcing an additional £150m of funding for adult social care in 2018-19, together with extra cash for rural areas. However, critics warned this was inadequate to meet long-term pressures.

The Ministry of Housing, Communities and Local Government said: “Our finance settlement strikes a balance between relieving growing pressure on local government while ensuring that hard-pressed taxpayers do not face excessive bills.

“We have listened to representations made from councils and delivered on these with extra funding. Overall, councils will see a real-term increase in resources over the next two years, more freedom and fairness, and with a greater certainty to plan and secure value for money.”

The problems facing local authorities are underlined by a National Audit Office (NAO) report that says England faces a recruitment crisis in social care, driven by poor wages and working conditions. It says current low rates of recruitment will not meet the estimated need for between 350,000 and 700,000 extra care workers by 2030.

Ministers have no up-to-date workforce strategy and have effectively ignored the growing crisis in social care staffing, the NAO report concludes. It says workforce planning is difficult while there remains little clarity about the sustainability of local authority spending on social care, which has fallen by 5.3% since 2010.

Brexit barriers on overseas workers could exacerbate the care worker shortage, the report suggests. There were 95,000 non-British European Economic Area nationals working in care in 2016-17, equivalent to 7% of the total workforce, although this rises to as much as 20% in parts of London and the south-east.

Meg Hillier, chair of the public accounts committee, said: “The NAO’s report shows the social care workforce is in a precarious state. We are increasingly dependent on care workers to look after ourselves and our families, yet the profession suffers from low pay, low esteem and high turnover of staff.”


The LGIU survey found spiralling demand for adult social care remained the greatest long-term pressure on council budgets, although a third of councils now say children’s social services funding is the biggest short-term challenge, fuelled by rising numbers of children being taken into care.

The thinktank said the vast majority of councils planned to make ends meet in 2018-19 by increasing council tax and drawing on “rainy day” financial reserves, as well as raising or introducing charges for services including parking, garden waste disposal, burial, planning, home care and meals on wheels.

Some of the respondents to the survey said charges would rise above inflation. One said charges would be imposed “wherever we can”. Another said parish councils would be asked to see if local residents would fund services such as grass cutting on roadside verges, youth clubs and street lighting.

“The situation is dire,” one respondent said, adding: “We pay for parking – why not pay for [access to] domestic waste sites, bus passes, etc?”

At the same time, many councils admit they are planning to reduce services further, with over half aiming to cut spending on parks and leisure centres, and a third lining up cuts – or further cuts – to social care, youth centres, libraries, art galleries and museums.

Almost all councils (95%) say they are planning to raise council tax this year – a far cry from 2012, when the same proportion froze rates, encouraged by ministers. Many councils plan to increase council tax by 6% in 2018-19 – the maximum allowed – including 3% earmarked to fund social care.

With conventional funding sources shrinking, three-quarters of councils say they are considering investing in local commercial property developments, commercialising council services or buying investment properties as a way of generating cash.

England’s councils have experienced a 40% cut in their funding from central government since the start of the decade. The LGA estimates that they face a £5bn funding gap by 2020, which could potentially push many councils to breaking point.

The LGIU survey analysed responses from about 113 individual county, district and unitary councils – around one third of the total in England. Nearly 70% of those that responded are under Conservative control.

A Department of Health and Social Care spokesperson said: “Everyone is entitled to good-quality care and we recognise there are challenges – that’s why we will shortly publish a health and care workforce strategy to address these issues.”


So , the chickens are finally coming home to roost ?

Major issues affecting many with incomes below the Income Tax starting point of £ 11,500 !!!!

Many will still be hit for 100% of Council Tax as the starting point is lower !!!

That in itself will be devastating for many.

One more reason for Council tax to be replaced by a progreesive tax.
Depressing article on the BBC news website this morning - of the total spend by all UK councils of £44 bn, over £15 bn is spent on adult care.

That's an entire third of their revenues. Everything else DWARFS in comparison.

There just HAS to be a 'cheaper way' - and not just by refusing to fork out anything for the elderly etc (To be fair, it didn't say how much of that £15bn was for elderly care, rather than disabled etc) - but by a total rethink on how to cope with an ageing and increasingly non-independent population.

My MIL with deep dementia costs £100 a day to look after 24x7. It's insane.

(And read Milly's appalling saga of the 'care' her elderly mum gets, in and out of hospital etc etc etc.Again, just insane)
Spending figures on adult social care are somewhat frightening.

Having said that , rewind to my college days some 48 years ago , " How to deal with an ageing population " was a popular topic in examinations.

Fast forward to 2018 ... no Government since those times has planned for an ageing population.

The buck stops with ALL politicians.
Well, I expect our own generation will be encouraged to drink out 'happy cocoa' every night, to send us into a deep deep stupor. Possibly for ever.

At least it's a cheap option.... (and think of that inheritance tax windfall for the government as we all peg out en masse!)

Win win for the government. Hurrah!
So much for rises in Council Tax to preserve services ?


https://www.theguardian.com/society/201 ... ities-warn


Council tax hikes will not stop cuts to local services, authorities warn.

LGA says government budget cuts and the cost of higher wages will outweigh additional income.


Unprecedented increases in council tax starting in April will not offset cuts to services including children’s centres and libraries, local authorities have warned.

The Local Government Association (LGA) said councils in England would raise an estimated £1.1bn through higher council taxes in 2017-18, but this would not cover the £1.4bn lost through cuts to central government funding plus the higher wage bill of £1bn.

Nearly half of English councils with responsibility for providing social care for adults and children will increase council tax by the maximum 5.99% allowed – 2.99% for general council tax plus a further levy of up to 3% to pay for the care of older and disabled adults – but this will not prevent further cuts to services, according to the LGA.


Councils will continue to reduce or close services such as children’s centres, libraries, leisure centres, parks, museums and road repairs to plug growing gaps in adult and children’s social care and homelessness services, it says.

The widespread emergence of what some councillors have dubbed “pay more, get less” budget settlements comes as town halls struggle to balance the books after years of cuts in core government funding.

Northamptonshire county council effectively declared itself bankrupt earlier this month after admitting that rising costs and shrinking income made it unable to set a legal budget.

The council must set out revised plans for cuts at a meeting this week after an auditors report warned that its existing proposed budget plans were “not credibly achievable”.

Northamptonshire’s predicament highlights how councils are increasingly reliant on one-off measures such as dipping into reserves, or selling buildings and land, to meet the spiralling cost of social care. Those pressures are being compounded in some cases by the failure to deliver savings with existing cuts.

The LGA said 147 of the 152 English authorities that provide social care services would levy a 3% council tax precept from April to raise extra cash for the care of older and disabled adults. Although this will raise an extra £548m, it will be wiped out by the cost of meeting the national minimum wage.

These councils face additional costs estimated to be at least £400m over the next 12 months as result of a legal judgement that requires care employers to pay the minimum wage to carers working sleep-in shifts, backdated for six years.

Out of the 152 “social care” authorities, 108 also plan to increase general council tax by between 2.95% and the maximum 2.99% allowed. This will raise an estimated £548m. Five councils have said they will freeze council tax for 2018-19.

The LGA chairman, Lord Porter. said: “Faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services.

“The extra income this year will help offset some of the financial pressures they face but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face. This means councils will have to continue to cut back services or stop some altogether to plug funding gaps.”

A spokesman for the Department of Housing, Communities and Local Government said: “As part of our finance settlement, we are delivering a real-terms increase in resources to councils over the next two years, more freedom and fairness, and greater certainty to plan and secure value for money.

“We want to work with local government to develop a new funding system for the future and encourage councils to submit responses to the review currently under way.”

England’s councils have experienced a 40% cut in central government funding since the start of the decade and face a £5bn funding gap by 2020.

The Local Government Information Unit thinktank warned this month that many English local authorities were teetering on the edge of financial crisis.


The chickens are coming home to roost ... by the squadron ?

Bottom line ?

LA financing is past it's sell by date ... both in income and expenditure.

Regressive Council Tax is only making things worse at street level ... just look at the explosion in " Arrears " across the UK.

Business rate levels are crippling the high streets ... even the charity shops are now few and far between !

No short term solution beyond continuing meltdown.