Insight Local Government Lawyer Insight December 2018 35 No one working in local government can have failed to recognise the scale of cuts, transformation and change affecting the sector arising from the government's austerity programme. In particular, whilst local government is recognised as probably the most efficient part of the public sector, deeper cuts have been imposed than on other public organisations including the police and, more particularly, health. Additional funds are poured into the NHS (even at the expense of preventative measures under public health budgets that have been cut) yet waiting times continue to increase and health budgets continue to overspend, due to the demands of an ageing population that is living longer with more complex needs. The National Audit Office (NAO) report Financial Sustainability of Local Authorities 2018, published in March 2018, confirmed that the financial health of local authorities across England is getting worse. Despite some short-term freedoms to increase council tax bills and one off short term funds from government, local authorities are struggling to juggle higher service demands (particularly for social care, both adult and children’s) and cost pressures against significant central government funding cuts of nearly 50% since 2010/11. The NAO report recognises that local authorities have been relying on reserves and services are overspending their budgets, neither of which is financially sustainable. Ironically some of the problems have been caused by the coalition government from 2010 and the subsequent Conservative governments freezing and capping council tax levels, meaning that base levels have not kept pace with inflation or the needs of local populations. Yet one of the original purposes of the council tax setting process was to bridge the gap between raising funds and spending to enable local authorities to set budgets that would ensure that they could meet their statutory obligations. Numerous local authorities have over the last few months warned that they are unlikely to be able to meet even basic statutory duties over the next few years without radical change and more funding from central government (e.g. East Sussex, Northamptonshire and Somerset County Councils). Opportunities However, it is not all doom and gloom. The government has incentivised local authorities through the ability to retain increases in business rates for their areas. Judith Barnes and David Hutton outline how local authorities can - and must - utilise their Place- making roles to ensure their future financial viability. The importance of Place and revenue growth for local government