Advice network in England warns support services for families hardest hit by cost of living crisis will be cut amid unexpected £400million bill caused by soaring inflation.
Services which district councils are under no legal obligation to provide – such as debt and benefit counselling, family hardship funds, homelessness prevention projects and help centres. aid for people living in poverty – are under threat.
Other discretionary services, including the management of leisure centers and swimming pools, parks, museums and theaters, also face closure or reduced opening hours as rising energy costs and wages requires them to reduce services to a legal minimum, the District Councils Network (DCN) said.
A district general manager told a DCN inquiry that in the medium term they “should review what discretionary services, if any, we can continue to provide”.
Large-scale projects such as downtown regeneration programs and coastal defense projects are also at risk as skyrocketing construction costs – in some cases rising by 40% within months – have rendered them unviable.
The DCN, representing 186 lower-tier councils outside major cities and urban areas in England, the majority of which are Tory-led, said that without government help, inflationary pressures and growing demand for services would push the District Councils deficit to £900m next year.
A council told the Guardian that its budget for this year, agreed in February, had been destroyed by soaring inflation. Fuel bills for its fleet of refuse trucks had risen by £500,000, while the cost of heating its swimming pools had risen by £750,000. Its staff payroll was expected to increase by 2.5% but instead increased by 7%.
Districts are also anticipating an explosion in demand for temporary housing from people rendered homeless by rising rents, evictions and foreclosures.
Neighbourhoods, often relatively small and close to their communities, manage front-line services used and noticed by almost the majority of residents such as garbage collection, housing, parking, recreation centers and parks, public toilets, town planning and the collection of housing taxes. They serve around 40% of the English population.
After years of central government funding being cut, many districts have become financially dependent on a mix of council tax and revenue from fees and charges levied on assets such as car parks and recreation centers . These revenue streams plummeted during Covid and in many cases struggled to recover.
Sharon Taylor, DCN Deputy Chair and Finance Spokesperson and Labor Leader of Stevenage District Council, said: “The District Councils are facing a perfect storm. Inflation and wage pressures are driving up our costs, just as the cost of living crisis is hitting our residents and fueling demand for our services. We absolutely do not want to cut recreation services or social assistance. But the risk is that something has to give.
The Local Government Association warned this summer that some councils could be pushed into bankruptcy due to spiraling inflation. The government has given no indication that it will step in to support funding for the council as it has done during Covid.
A government spokesman said: ‘We have made an extra £3.7billion available to councils this year and are ready to speak to anyone who is worried about balancing their budgets. This winter, we are also offering a discount on energy prices to municipalities whose bills have been significantly inflated by the global energy crisis. »