West and North Northamptonshire councils 'disappointed' with local government funding for 2024/25

Two Northamptonshire councils have said they are ‘disappointed’ with the newly announced government funding for local authorities in 2024/25, with one warning that they are being pushed to seek ‘more severe reductions’ in valued services.

The local government finance settlement was announced by Levelling Up Secretary, Michael Gove, on Monday (December 18), with a provisional £64 billion package and a proposed funding rise of 6.5 per cent on this year’s levels.

Both North and West Northamptonshire councils have since spoken out about their disappointment with the levels provided.

The 6.5 per cent increase also includes an assumption that councils will enforce the maximum 4.99 per cent rise in council tax - meaning only 1.5 per cent of the increase comes from the Government.

Both Northants councils have opted to raise council tax by the maximum allowed amount in their draft budgets for next year.

Leader of North Northamptonshire Council, Cllr Jason Smithers, said: “The immediate response from the sector, including North Northamptonshire, is one of disappointment in that the settlement fails to address the significant problems facing local authorities.

“Growth in demand together with excessive inflationary increases have driven costs far in excess of the funding available, pushing councils such as ours to seek further and more severe reductions in the services valued by residents.

“Much of this increase was expected from the Autumn Statement produced last year.

"It will not impact significantly on the council’s draft budget proposals; the only exception is the Services Grant which has reduced nationally by more than had been anticipated.

“It is obviously concerning that the Government is also encouraging local authorities to consider the use of reserves to maintain services in the face of these pressures.

“Here in North Northamptonshire, we are working hard to minimise the use of reserves for recurring cost requirements, as once this is gone the ability of the council to manage in year movements or smooth service change is diminished.

"This suggestion is not a long-term solution.

“The council is forecasting an increasing budget gap ranging from £37m in 2025/26 to £84m in 2027/28, predominantly as a result of the continuing need expected in our demand-led services, which currently shows no signs of slowing.

“This will inevitably mean more difficult decisions to come if no further Government support is forthcoming and at a time when the council is acutely aware of the burden it could place on households.

“The council is disappointed to see that this is the sixth one-year settlement in a row.

"Whilst an increase in funding is a must, the council is also calling for a multi-year settlement so that there is certainty in planning for the future.”

A poll from the Local Government Association published ahead of the settlement announcement found that nearly one in five council leaders believe it is ‘very or fairly likely’ that their council will go bust this year or next.

Only 14 councils have issued section 114 notices since 2000, however nine of these were declared within the last five years.

The former Northamptonshire County Council began the trend in 2018 after years of financial mismanagement that resulted in debts of around £1billion.

In response to the funding announcement, Cllr Malcolm Longley, cabinet member for finance at West Northamptonshire Council, said: “The local government settlement was not at the level that we had anticipated and whilst we are disappointed with the outcome, we always plan our finances prudently and carefully and so have a contingency built into the draft budget to help deal with issues such as this.

“We are currently working through the detail and the outcome will be set out in the final budget report.”

West Northamptonshire’s draft budget went to cabinet on December 12 and a six-week public consultation is currently under way.

Leader of WNC, Cllr Jonathan Nunn, told the Local Democracy Reporting Service (LDRS) that the council is ‘confident’ in its budget and though it’s a ‘great deal bigger’ it is ‘far more realistic’ after the surge in demand this year.

West Northants is also projecting an increasing budget gap starting with a £42m deficit in 2025-26 rising to £80m over four years.

Prevention was highlighted as a big theme to tackle increasing demand and limited funding.

Cllr Nunn said: “It’s always that irony that the government insists we do a balanced budget but they insist that we do it before they tell us how much money they’re going to give us.

“It’s straightforward maths.

"Most years we’re allowed to increase council tax by 4.99 per cent - two per cent of that has to just go to adult care.

"We’re seeing inflation of ten per cent or thereabouts, so there immediately is a gap if you add to that increasing demand.

"You’re always going to have to do more with less.

“If all you’re clever enough to do is just shave a bit of money off of everything, you reach the point when you’re pretty much cut back to the bone and you’ve got to start reducing services - unless you’ve done bold things like preventative stuff.”

The final budgets for the next financial year will be presented to both councils in February 2024.