Local Government Association statement on Spring Statement 2022

The Local Government Association (LGA) has issued a statement on the Spring Statement announced by the Chancellor of the Exchequer.

Cllr Shaun Davies, Chair of the LGA’s Resources Board, said:

“This year will be the toughest for more than half a century, particularly for those on lower incomes, so it is good that the Chancellor is taking steps with financial measures which will help mitigate against some of those pressures for struggling households.

“As the impact of cost-of-living concerns grow, the mainstream benefits system will need to provide the first line of support for people so that councils and local partners can concentrate their limited resources on helping those who need tailored and additional help. We are pleased the Government is providing a further £500 million for councils to continue to provide targeted local welfare support to low-income households facing financial hardship in their communities. Councils will need maximum flexibility and quick details on allocations, so they can ensure this funding reaches those in need and can be used to prevent families from reaching crisis point in the first place.

“The increase in short-term government funding through the Household Support Fund is a positive step but cannot on its own address underlying cost-of-living pressures, or to help people to make the most of their money and strengthen financial resilience. With many households likely to be economically vulnerable for some time to come, councils also want to work with government on an effective long-term solution to preventing poverty and disadvantage that moves away from providing crisis support towards improving life chances.

“Local government itself continues to face significant financial challenges. Inflationary pressures, our own wage bill and energy price rises, as well as the ongoing cost of dealing with and recovering from the COVID-19 pandemic, look increasingly likely to make 2022/23 significantly more challenging for councils than initially estimated when the Government made its funding decisions as part of the Spending Review. We remain clear that this continued pressure cannot be met by council tax rises alone.

“It is crucial that local services have a long-term, sustainable future with certainty for councils over their funding. Councils still need urgent for clarity from the Government on which local government funding reforms will happen and when, and what the impact of any changes would be. The continued model of relying on council tax raising powers to increase councils’ core spending power is not sustainable or fair on local taxpayers or those who reply on council services.”

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