‘Inevitable’ that a local authority will go bankrupt, says children’s services director

A local authority going bankrupt is “just inevitable”, a children’s services director has said.

Jon Abbey, director of children’s services at Haringey, told the delegation at Community Care Live this month: “There will be a local authority, very soon, that will go broke. It’s just inevitable.”

Abbey, who clarified Haringey was not a service at risk of bankruptcy, spoke in the context of a looming government spending review and expected cuts to local authority budgets.

Abbey told delegates how, in Haringey, the budget for children and young people services had already fallen substantially, and they were expected to cut more. In 2008-9, children and young people services had a gross budget of £125.9m, but in 2015-16 that budget is £80m.

“We can’t get away from the fact that if we try to operate with what we’ve got, when coupled with adults’ services and with our service centre, we’re going to be broke in three years,” Abbey said, and he added that the challenge for authorities now is how they think differently, and that they need to reform and change.

The Local Government Association warned recently how “12 or 14” councils are on the brink of financial failure. Joe Anderson, executive mayor of Liverpool, last week told The Guardian that the council was “looking over the abyss”.

Local authorities have a duty to balance their budgets each year and cannot borrow to finance their day-to-day spending. This means local authorities cut spending in times of financial pressure to ensure balanced budgets. There are concerns that an authority may be unable to meet statutory duties set out by government as they balance their budgets. The Department for Communities and Local Government has the power to intervene in cases where authorities experience financial difficulties.

Effective or efficient

Abbey said, it wouldn’t be effective or efficient to have 32 local authorities in London in the future, and partnership working would become more prominent.

“We are already seeing it in the tri-borough (a partnership between the City of Westminster, the London Borough of Hammersmith and Fulham and the Royal Borough of Kensington and Chelsea), [and] with Richmond and Kingston working very successfully. How do we broker those relationships with each other to enable the resource to stretch, because the need isn’t going to go away?”

He said investing in the workforce will help improve quality and efficiency: “Investment in technology, the place, the equipment, the work pattern has to change. We have to enable our social workers to work in the modern place as well as the modern geographic area and that means investing in them.”