Councils face unsustainable situation, warns LGA chair in Spring Budget response

The Local Government Association (LGA) response to the Chancellor's Spring Budget welcomed the decision to extend the Household Support Fund – used by councils to support vulnerable families.

But, Councillor Shaun Davies, chair of the LGA, and also Labour leader of Telford & Wrekin Council, said the decision had come late, and the six-month extension was not long enough.

He said: “We are pleased the Chancellor has extended the Household Support Fund (HSF), which has helped millions of households facing hardship. It is disappointing that we had to wait until the very last minute for an extension, and that it is only for a short period. Three quarters of councils expect hardship to increase further in their area over the next 12 months.

“The Government needs to use the next six months to agree a more sustainable successor to the HSF. Councils need certainty and consistent funding to efficiently maintain the staff, services and networks that help our most vulnerable residents. Without this we risk more people falling into financial crisis as we head into winter."

Councillor Davies said councils of all political colours are facing financial peril, and called for more funding to support – or maintain - public services.

He has also called for longer-term settlements to allow councils greater certainty in planning.

He said: “It is disappointing that the Government has not announced measures to adequately fund the local services people rely on every day. Councils continue to transform services but, given that core spending power in 2024/25 has been cut by 23.3 per cent in real terms compared to 2010/11, it is unsustainable to expect them to keep doing more for less in the face of unprecedented cost and demand pressures.

"Councils of all political colours are starting this financial year in a precarious position, and having to scale back or close a wide range of local services, so the continued squeeze in public spending in the years ahead is a frightening prospect for communities.

“This year also saw the sixth one-year settlement in a row for councils. Keeping them on a financial drip-feed in this way has led to the steady weakening of local services. Councils need greater funding certainty through multi-year settlements to prevent this ongoing decline but also to ensure key national government policies – such as boosting economic growth, creating jobs and building homes – can be achieved.”