The 2016 Local Government Finance Settlement has been announced.

Initial analysis by the Local Government Association, which represents more than 370 councils in England and Wales, shows that:

• Taking into account the full range of ways councils can generate income, November’s Spending Review delivered a ‘flat cash’ settlement (6.7 per cent real terms reduction) for councils over the next four years. But the implications of this settlement will vary significantly from council to council depending on the range of their responsibilities and the communities they cover.
• Settlement core funding will fall by 6.1 per cent (£2.6 billion) in 2016-17. This includes income from retained business rates, revenue support grant and council tax at 2015/16 levels.
• The council tax referendum limit for all councils will remain at 1.99 per cent while social care authorities will be able to increase council tax by a further 2 per cent (3.99 per cent in total). Income from this additional precept must be spent on adult social care. Low-taxing councils will be able to raise a minimum of £5 extra per household per year.
• LGA analysis suggests that if all 152 social care authorities used the precept in full in 2016/17 they would raise around £400 million for social care services and the average Band D taxpayer would see an average rise of £24 in their bill. The LGA has previously estimated that the social care funding gap would grow by a minimum of £700 million in 2016/17.
• The settlement confirms councils will not receive any additional Better Care Fund funding for social care in 2016/17 and will receive £105 million in 2017/18.
• Councils will face increased cost pressures as a result of demand-led and inflation pressures on local services and government policies coming into force in 2016/17. For example, the National Living Wage will cost councils at least £340 million next year to lift pay for staff but primarily to cover increased contract costs to home care and residential providers and increases in national insurance contributions as a result of the end of state pension contracted out arrangements (£797 million).

New Forest Liberal Democrats Chair-elect, Jack Davies, said:

“The Conservatives seem to think the people of the United Kingdom are fools. They have unleashed these damaging cuts on local government and are hoping nobody notices.

“I am clear, the New Forest Liberal Democrats will oppose these unnecessary measures.”

Responding to today’s Finance Settlement, Lib Dem Local Government Association Group Leader Cllr Gerald Vernon-Jackson said:

“Following this announcement it will be another very bleak Christmas for Local Government and the millions of people who rely on its services.

“By slashing Councils funding yet again, we are seeing death by a thousand cuts to services for some of the most vulnerable people in our communities. Local government services have already began to wither away as social care and children’s services pressures swallow up more and more of Councils budgets, leaving little for anything else.

“The Government has made yet again a big song and dance about the “extra flexibility “ it has given Councils to raise Council tax to cover these additional and raising cost, but it is all smoke and mirrors. That flexibility will raise less than a quarter of what is need alone for social care leaving a massive funding gap in social care of £6 billion by 2020”