Times are hard – the coalition Government has outlined plans for huge cuts of up to 25% in local government spending in the emergency budget last month. It followed the previous announcement of swingeing cuts of £1.1bn and council chiefs were bracing themselves for even more bad news.

And the forecast is indeed bleak, with a massive wave of cuts being met by a rising tide of demand for services, creating the perfect storm to batter beleaguered local authorities.

Nick Hope of the think tank New Local Government Network, talks in stark terms of the outlook over the next five years.

“A tsunami of funding cuts will hit councils over this parliamentary term. If demands on local government expenditure were to remain static in this period then meeting them would be tough, but demands on expenditure such as in social care are likely to grow, making the scale of the challenge even greater. Local government will have to climb up a downward moving escalator if services are not to hit rock bottom,” he says.

The Department of Communities and Local Government (DCLG) will cut its £82 billion grant to local authorities in England, by between 25-30% over the next four years.

Losing out?

Areas highlighted for cuts in the emergency Budget include education, public transport and housing, all sectors offering services to the most vulnerable in society.

The Building Schools for the Future programme is one of the first initiatives to face the axe. A total of 715 old and crumbling school buildings due for much-needed refurbishment will now remain in a state of disrepair. Education secretary Michael Gove seems to have made the situation even worse by not knowing which schools will lose out, offering hope and then dashing it.

Housing benefit will be capped at £280 a week for a one-bedroom property to £400 a week for a four-bedroom or larger, a move that will limit choice for those on low incomes.

The £500m subsidy to bus service operators has been scrapped, leading to a likely reduction in routes to isolated rural communities, while £220m has been cut from Building Britain’s Future, the affordable housing programme begun under the last government. The policing budget is also targeted leading to a likely reduction in support staff and less officers on the beat.

Further details of cuts are due in September when the government will announce the results of its Comprehensive Spending Review.

Local government leaders are pressing the case for preservation of basic services, perhaps at the expense of non-elected organisations. “Councils provide vital front line services upon which millions of people rely. Ministers need to recognise that when detailed decisions on spending are made in the autumn. It is clear that the public want to see important frontline services protected, but are willing to rein in the quango state and remove unnecessary tiers of middle management to bring the deficit down,” said Margaret Eaton, chair of the Local Government Association (LGA).

Meanwhile, the ring-fencing of NHS budget is coming under pressure as local authorities argue that reducing services provided by local authorities may lead to an increased demand on the health resources.

Speaking at the launch last week of Improving Health Outcomes, a report by the 2020 Public Services Trust, Stephen Dorrell, chair of the health select committee and former Tory health secretary warned that “plans to increase spending on the NHS in real terms year on year would mean cuts in other services such as social care and housing, both of which will have an adverse impact on health.”