Insight Local Government Lawyer Insight December 2018 39 advance, to extricate the authority from the vehicle. Conclusion As mentioned above there is no one size fits all. Of the 50 or so housing companies we have established over the last few years, no two are exactly the same, from a significant non-procured joint venture with a registered provider, Hyde Housing in Brighton delivering affordable housing, through to housing for private rent and housing for sale in a number of other authorities - all arrangements are bespoke. Although resources within local authorities are thin on the ground, unless authorities invest in the Place and promote growth, the prospect of a self- inflicted downward economic spiral increases, particularly with the uncertainties of Brexit. With a positive mind-set and collaboration as appropriate with partners there are significant opportunities to control the future destiny of the area - never has it been more important to invest time, effort and energy in agreeing and working towards delivery of a vision for Place. Judith Barnes and David Hutton are partners of Bevan Brittan LLP barnes/ hutton/ APPENDIX Financial sustainability of local authorities 2018 Published: March 8, 2018 "…Continued increases in demand for social care and tightening resources are pushing local government towards a narrow remit centred on social care. From 2010-11 to 2016-17, the estimated number of people aged 65 and over in need of care increased by 14.3%, and the number of children being looked-after grew by 10.9%. Social care now accounts for 54.4% of local authorities’ total service spend, up from 45.3% in 2010-11. Despite growing demand, spending on social care still fell by 3.0% from 2010-11 to 2016-17. However, this compares with a 32.6% reduction in spending on all other service areas including: reductions of 52.8% on planning and development; 45.6% on housing services; 37.1% on highways and transport; and 34.9% on cultural and related services. There is further evidence that these spending reductions are impacting frontline services. Since 2010-11, 33.7% fewer households have their waste collected at least weekly, the number of bus miles subsidised by local authorities outside London has fallen by 48.4%, and the number of libraries has reduced by 10.3%. The Ministry of Housing, Communities and Local Government (the Department) has made improvements in understanding the sector’s financial position since the NAO’s last report in 2014 but, because responsibility for services is spread across departments, there is no single view of how funding cuts are impacting the whole of local authority services. At a time when social care spending is being prioritised by local authorities, failing to understand how funding and demand pressures affect the full range of local authority activities risks unintentionally reducing services to a core offering centred on social care. The government has given local government several short- term cash injections in recent years, but most of this funding has only been available for adult social care. Uncertainty remains over the long-term financial plan for the sector. The government has confirmed its intention to implement the results of the Fair Funding Review in 2020-21 and to allow local authorities to retain 75% of business rates, but the implications of these changes for local authorities’ finances are not yet clear. “Current funding for local authorities is characterised by one off and short-term fixes, many of which come with centrally driven conditions. This restricts the capacity of local authorities and yet the weight of responsibility to respond to increased demand and maintain services remains very much on their shoulders. The Government risks sleep walking into a centralised local authority financial system where the scope for local discretion is being slowly eroded." Amyas Morse, head of the National Audit Office, 8 March 2018 Notes for Editors ● 49.1% real-terms reduction in government funding for local authorities, 2010-11 to 2017-18 ● 28.6% real-terms reduction in local authorities’ spending power (government funding plus council tax), 3.0% real- terms reduction in local authority spending on social care services, 2010-11 to 2016-17 ● 32.6% real-terms reduction in local authority spending on non-social-care services, 2010-11 to 2016-17 ● £901 million overspend on service budgets by local authorities in 2016-17 ● 66.2% percentage of local authorities with social care responsibilities that drew down their financial reserves in 2016-17 ● 10.6% percentage of local authorities with social care responsibilities that would have the equivalent of less than three years’ worth of reserves left if they continue to use their reserves at the rate they did in 2016-17 ● 13 - number of departments asked by the Ministry of Housing, Communities and Local Government to provide information as part of the Spending Review 2015 1. Central government funding to local authorities has fallen by 49.1% from 2010-11 to 2017-18. This equates to a 28.6% real- terms reduction in spending power. In the 2015 Spending Review and the 2017 Budget, the government provided extra funding to relieve growing spending pressures in adult social care. Consequently, the rate of spending power reductions has levelled off since 2016-17 for social care authorities (single tier and county councils) and is predicted to remain relatively flat until 2019-20. 2. Total overspending on services by social care authorities in 2016-17 amounted to £1.023 billion. District councils, who do not have social care responsibilities, did not overspend in aggregate. Combined overspends of both social care and district councils were £901 million. 3. 10.6% of single tier and county councils would have the equivalent of less than three years' worth of reserves left if they continued to use their reserves at the rate they did in 2016-17. A further 9.9% would exhaust their reserves within four to five years – reference figure 24 in the report.