New independent report highlights financial challenges facing NE councils and communities

11 March 2014

A new report highlighting the financial pressures and increased demands for services that councils in the North East are facing has been published by ANEC.  It is based on a wide-ranging inquiry undertaken by the Policy Research Group at St Chad’s College, Durham University, and was commissioned by ANEC and the Institute for Local Governance.

The report finds that while all councils have been affected by Government spending cuts, councils in the least prosperous parts of the country have been hardest hit – and these inequalities are likely to get worse. The impact is especially severe in the North East, where there is high demand for local public services, rising cost pressures in key public services such as health and social care and higher than national average reductions in spending power.

The report goes on to point out that councils in the North East have responded positively to these pressures and challenges. They have made substantial budget savings while safeguarding key services; they have worked hard at collaboration and integration of services; and they have supported the most vulnerable individuals through debt advice and support for credit unions and food banks.  However, councils cannot continue indefinitely in this way – there are key issues around the ability to provide services in the future and the financial sustainability of councils themselves.  The report also recognise the crucial importance of economic development and how councils have continued to support a variety of economic development initiatives, working closely with the private sector.

The report concludes that:

  • There should be a thorough review of the future for local government, addressing tough questions about what councils should be asked to do, given their reduced resources;
  • A review of local government finance is essential – the system of local government funding must be – and be seen to be - fair;
  • If local government is going to be slimmed down, we need to understand what could fill the gap. The potential for the voluntary and community sector to do this should be fully examined; and
  • The re-balancing of the UK economy must be a strategic priority, supported by Government.