Magazine article Public Finance

The Perfect Storm

Magazine article Public Finance

The Perfect Storm

Article excerpt

These are interesting times for the public sector.

First, it's been a breathless few weeks for those working in local government finance. After months, years even, of mutterings and warnings, the dam finally broke and, in early February, Northamptonshire County Council became the first authority in almost 20 years to issue a section 114 notice. Our news story opposite (page 5) rounds up the latest developments at the authority.

Nor was this year's settlement a straightforward affair for local government secretary Sajid Javid. A short but effective campaign led by some backbench shire Tories resulted in a last-minute concession of £i5om in extra money for adult social care, the largest slice of which will be claimed by the counties, as well as some increases to the rural services grant.

Our cover feature (page 22) highlights that county councils, with their growing elderly populations, are among the authorities that have been left with little choice but to dip into their reserves to balance their budgets.

While much national press attention has focused on the politics, pointing at the awkwardness of funding shortages in the Conservatives' true blue backyards, difficulties are not confined to English counties.

PF's analysis revealed that London boroughs have also had to resort to raiding reserves, thanks to a slightly different combination of pressures, particularly homelessness and children's services (see page 28).

Using reserves is clearly not a sustainable strategy - you can only spend them once - so all eyes are on Javid's Fair Funding Review to come up with a lasting solution. …

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