Agenda item

Dennis Skinner, Head of Improvement, introduced the item. He advised members that the NAO had conducted a review into the financial sustainability of councils.

He introduced Alex Burfitt, Senior Research Manager at the NAO. Alex outlined the review and spoke about the financial demands on councils and the implication of these. He discussed the variations in funding for different authorities. Authorities were dealing with more demand on services when they had less money. The savings being made from other types of spending demonstrated the ingenuity of the sector, but questions needed to be asked on how long councils could continue to make these savings. Commercial profits were not yet having a great impact. There was growing concerns around money spent on social care and on children’s services. There was a marked increase in the number of counties that were overspending and had used their reserves. Although some could continue to rely on reserves, others would have problems.

In the discussion which followed, members made the following points:

·         Members asked how many local authorities were relying on their reserves.

·         There was a discussion around district councils having taken the biggest reduction in grant, and consequently having done much to reduce spending.

·         Members asked what the methodology was.

·         Members asked that the information be shared with the Community Wellbeing and Children and Young People Boards.

·         It was suggested that government should go into councils to provide support on financial management.

·         There should be a plan developed on how councils could build up their reserves.

·         There was a discussion on social care and the problems it was causing councils. There needed to be a transformation of how services were delivered.

·         Disappointment was expressed that a recent LGA digital event had been cancelled due to lack of interest.

·         Members emphasised that the LGA needed to increase lobbying for the government to put more money into the sector. Members were advised that this issue was being considered by other boards, and there would be a significant debate on this.

·         There was a discussion around the problems of reliance on council tax and the burden not falling equally.

·         Members discussed how to stop councils falling into financial problems.

·         Audit reports should be considered and the situations where councils had coped taken into account. 

·         It was highlighted that problems were a consequence of legislation which had been badly thought through.

Decision:

1.    Members noted the report.

Action:

1.    It was agreed that lead members would discuss the issue further.

2.    It was agreed that slides would be circulated to members.