Labour austerity “baked in” to Southwark until end of the decade, as Government confirms swingeing local government cuts
Overall grant funding to decrease £20m over three years for Southwark
Cuts covered up by “unrealistic” assumptions of council tax growth
Council still facing £60-90m of savings
Real terms Core Spending Power down 3.4%
The Labour Government yesterday confirmed the results of its so-called “fair funding” review – which was set to impose swingeing cuts to local government funding in London.
The announcement has confirmed that funding to Southwark will be cut by £20 million over three years, leaving the council facing a gap of £60-90 million.
However, the Government’s forecasts disguise this cut by assuming maximum council tax increases every year, and a large growth in the number of households it can collect from. It's only when those council tax assumptions are removed from the overall projected spending power of the council that the startling £20 million cut is revealed.
The overall core spending power (CSP) – which is the total amount of money the council can spend and includes the council tax assumptions – will fall by 3.4% in real terms in Southwark according to the Institute of Fiscal Studies.
The final funding settlement – which broadly aligns with expectations set out in earlier reports from the council – will leave Southwark facing a gap of £60-90 million over three years. This is due to spiralling pressures including temporary accommodation, SEND costs, and council officer wages all projected to continue to increase, which far exceed the amount of money the council receives in council tax, business rates, and government funding which is set to fall by £20 million over the same period.
In November, the Labour party refused to sign a joint letter written by the Liberal Democrats to the Secretary of State, which set out the serious peril the funding reforms would put Southwark’s finances in.
Commenting, Southwark Liberal Democrat leader Cllr Victor Chamberlain said:
“The government is cutting Southwark’s funding and trying to hide it by assuming big rises in council tax that aren’t realistic. When those numbers don’t stack up, the council is going to be forced to burn through reserves and slash services, and it’s residents who are left paying the price for Labour’s cuts.
Other parts of the country are rightly seeing big boosts to local funding, but our local Labour leaders have totally failed to stand up for Southwark
Labour promised an end to austerity but they’ve now baked it in until the end of the decade in places like Southwark.”