Ministers accused of being “in denial” over local authority finances

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In a new report by the Public Accounts Committee, Ministers have been accused of being “in denial” over the “perilous” state of local government finances in England as councils struggle to maintain essential services like adult and children’s social care.
The Public Accounts Committee says the government is using short-term cash investments which won’t fix the long-term problem of funding social care.
It says central government to English local authorities has been cut by almost half in the last eight years but at the same time demand for critical council services has risen: housing is under strain with over a third more people homeless and adult and children social care are confronted with growing demand. The rate of looked-after children, for example, is at a 25-year high. The cost of adult and children’s social care has forced many local authorities to reduce spending on services in other areas.
The report says that some councils are now in an extremely worrying position: overspending their budgets for social care, reducing key services, falling back on financial reserves and increasingly relying on generating other sources of income, which comes with greater risks.
It adds that the Government has had to inject large amounts of additional funding to ensure that the local authority sector can keep going in the short-term: £1.4 billion in the 2018 budget. Yet disturbingly, there is still no sign of a clear plan to secure the financial sustainability of local authorities in the long-term.

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