The 2021-22 Local Authority Expenditure and Finance Budget report reflects, for the first time, the financial impact of COVID-19 as local councils had to shell out billions more than previously budgeted during the last fiscal year. Which areas have received increased funding and are cuts planned?
Net current expenditure on services is budgeted at £105.6bn for 2021-22, which is £5.2bn more (5.1%) than the £100.5bn budget set for 2020-21 after adjusting for inflation.
This represents a steep increase of £6.2bn (6.2%) on what was planned for 2019-20.
Net current expenditure is the offsetting expenditure on the running of local authority services, which includes areas such as staff, heating, lighting and cleaning.
Expenditures are offset by income from sales, royalties and charges, and other income (excluding grants), which together add up to net current expenditure.
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The most significant increases in the 2021-22 figures impacted:
- Education Services – recorded a budget of £35.9bn in 2021-22, an increase of £971m (2.8%) on the 2020-21 budget.
- Adult Social Care – had a budget of £18.6bn in 2021-22, an increase of £642m (3.6%) on the 2020-21 budget.
- Highways and transport – had a budget of £5.9bn in 2021-22, which was £1.9bn (48%) more than the 2020-21 budget. This increase is attributed to greater support for operators by Transport for London.
- Other Services – budgeted at £953m in 2021-22, an increase of £419m (78%) over the 2020-21 budget.
It was noted in the report that a majority of the revenue account budget for 2020-21 was made before the onset of COVID-19, reflecting the magnitude of the impact of the pandemic on government spending.
However, despite the ambitions of the government’s ‘Leveling Up’, which is a program to reduce imbalances – mainly economic – between areas and social groups in the UK with increased funding, there are still plans to cut spending on local councils during the year.
NationalWorld’s analysis found, after adjusting for inflation, that almost £320m less funding for local councils is planned for the coming year than last.
The discounts are said to range from 1% to 2.6% depending on the council.
This begs the question, how are local councils supposed to deliver the ambitions of Leveling Up, of which they are supposed to play a major role, with less budget?
The provisional budget for the next financial year must be published in June 2022.
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This notice was published: 2022-03-09 14:01:00