Sector may lose cash to schools

Councils may come under increasing pressure to cut social services
spending to meet government targets on schools.

The warnings come in submissions from the Local Government
Association and Association of London Government on the
consultation into the new system for allocating funding to councils
(news, page 6, 12 December).

“This means that in some boroughs passing a high increase to
schools means that other service areas face a cut in grants,
impacting on their ability to provide other much needed services
like social services,” the ALG response states.

Stephen Lord, member of the finance team at the LGA, said councils
with the lowest increase in government grant would find it most
difficult to balance spending between education and social
services.

Under the new system, councils will receive increases of between
3.5 and 8 per cent. The average council spends 45 per cent of its
budget on education. “A council may restrain spending across all
other areas. With social services being the next largest area, it
will lose more,” Lord warned.

The deadline for responses to the consultation passed last week
with some London boroughs and councils in the South East urging the
government to think again. They say many of them will face severe
shortfalls in grant and expected expenditure in the next three
years.

Although there are no plans to delay the introduction of the new
system, the deputy prime minister’s office responded this week by
launching an additional year-long review of local government
funding.