Government’s cut in council funding could put public services at risk

Councillors in South Oxfordshire have expressed their disappointment in government proposals that would mean a cut in funding for the district council and a lack of any certainty over its future finances.

The government is consulting on proposals for a one-year financial settlement for local authorities, which amounts to a cut in funding for South Oxfordshire District Council at a time of high inflation and at a time when council finances across the country are already under significant strain. That financial strain has been made worse in the past two years as a result of the Covid-19 pandemic.

Cllr David Rouane, Leader of South Oxfordshire District Council, said: “Despite the government’s claims of an overall increase in spending, this amounts to a real terms cut in our finances. Councils like ours around the country are working hard to balance their books – a job that is made significantly more difficult by government cuts, and by the lack of any long term clarity.

“It’s extremely disappointing to be in this position again, and it’s really not clear how the government expects councils to make medium or long term financial plans when it repeatedly provides one-year settlements – something it began doing long before the pandemic.”

The settlement also provides no increased flexibility for councils to manage their own income through council tax, meaning a lack of local control over how finances are managed. The government has also failed to explain what might replace the New Homes Bonus funding stream, which is worth around £2m a year in South Oxfordshire given the large amount of housing growth in the district in recent years – this means there’s even less certainty over budget setting at the council in future years.

The council will be responding to the government’s consultation on the settlement proposals and intends to publish its response in the New Year.