Coventry City Council has sent a joint letter to the government from the Council Leader and Conservative Group Leader.
The letter repeats a call for urgent action to help local authorities struggling through lack of funding.
It urges the government to resolve long-term funding reform, provide multi-year settlements, and to top-up funding for housing and social care this year and next.
The Council say the multi-year settlement has been talked about since 2016 but nothing has happened, while at the same time pre-budget proposals that include cuts in services and higher Council Taxes are being forced on the Council because of the government’s inaction.
The Council wrote to Michael Gove MP, Secretary of State for Levelling Up, Housing and Communities, in August this year telling of the ‘unprecedented times’ being faced by Coventry City Council.
There was no reply, but it is hoped this letter from both the Labour and Conservative parties will be answered.
The letter reminds the Minister that despite many years of strong financial management to keep within budgets, the Council is this year facing a multi-million pound deficit.
This has mainly been caused by an increased demand for adult and children’s social care, demand for housing, and wider inflationary pressures.
The letter also outlines underfunding compared to other local authorities, with the Council receiving £31m less than the average local authority every year even though it lies just outside the most deprived quartile of local authorities in the country – at 81st out of 317.
The letter was also signed by Cllr Richard Brown, Cabinet Member responsible for finance at the Council.
The letter states: “We all believe in Coventry that this situation can only ultimately be resolved by long-term funding reform which provides multi-year settlement certainty, as acknowledged by the government as far back as 2016. Ahead of that, we are calling on your department to assist, and would urge you to consider urgent top-up funding for social care and housing authorities in this year and the next, particularly for those in more deprived areas.
“We note Simon Hoare MP’s comment in delivery of the recent policy statement that his door is always open and welcomes comment on the settlement, so we would welcome a collective cross-party discussion on potential measures to help.”
The letter urges the government to resolve long-term funding reform, provide multi-year settlements, and to top-up funding for housing and social care this year and next.
The Council say the multi-year settlement has been talked about since 2016 but nothing has happened, while at the same time pre-budget proposals that include cuts in services and higher Council Taxes are being forced on the Council because of the government’s inaction.
The Council wrote to Michael Gove MP, Secretary of State for Levelling Up, Housing and Communities, in August this year telling of the ‘unprecedented times’ being faced by Coventry City Council.
There was no reply, but it is hoped this letter from both the Labour and Conservative parties will be answered.
The letter reminds the Minister that despite many years of strong financial management to keep within budgets, the Council is this year facing a multi-million pound deficit.
This has mainly been caused by an increased demand for adult and children’s social care, demand for housing, and wider inflationary pressures.
The letter also outlines underfunding compared to other local authorities, with the Council receiving £31m less than the average local authority every year even though it lies just outside the most deprived quartile of local authorities in the country – at 81st out of 317.
The letter was also signed by Cllr Richard Brown, Cabinet Member responsible for finance at the Council.
The letter states: “We all believe in Coventry that this situation can only ultimately be resolved by long-term funding reform which provides multi-year settlement certainty, as acknowledged by the government as far back as 2016. Ahead of that, we are calling on your department to assist, and would urge you to consider urgent top-up funding for social care and housing authorities in this year and the next, particularly for those in more deprived areas.
“We note Simon Hoare MP’s comment in delivery of the recent policy statement that his door is always open and welcomes comment on the settlement, so we would welcome a collective cross-party discussion on potential measures to help.”
The full letter can be read below.
Dear Secretary of State
This is a joint, cross-party letter from Coventry’s Labour and Conservative Group Leaders, following the letter from Councillor Richard Brown to yourself on 22 August 2023.
Coventry City Council has a history of always managing its financial position robustly. There has always been a cross political party consensus in the City that we must take the required difficult decisions to ensure we manage within our resources to set a balanced budget. This is what we have done every year, taking a creative and innovative, yet prudent approach to ensure our financial sustainability.
But we, like so many other local authorities of different political colours, are now in unprecedented times. Local Government has seen ‘a very significant real term funding reduction’ over many years (as acknowledged by Simon Hoare MP last month in the evidence he provided to the Levelling Up, Housing and Communities Committee), and we have responded to that in Coventry. The volatility in the last two years in particular, has seen uncontrollable inflation which has increased activity and created abnormal market conditions in both the care and housing sectors which are not financially sustainable. We have taken significant management action to mitigate these pressures but despite that, we are forecasting an overspend in 23/24 of over £11m, which without action, will result in a £21m deficit in 24/25, worse in subsequent years.
We accept that additional resources were provided for Local Government in the Autumn Statement 2022, for both this financial year and next of 9% and 3%, and whilst we appreciate this, it is not sufficient to cover the unprecedented rise in demand and inflationary pressures particularly in social care and homelessness – which 75% of our budget is now spent on. This is borne out in the forecasts stated above.
We would also point out that Coventry’s core spending power does not compare favourably to the national average. Per average head of population, Coventry receives much less than most Councils, which when adjusted to reflect our greater than average number of properties below the average Council Tax Band D, results in £89 per head, or £31m less than the average local authority every year. This is despite Coventry ranking as the 81st (out of 317) most deprived local authority area in the country.
We do not have a history of undelivered savings targets, nor excessive use of reserves. However, the announcement in the Autumn Statement 2023, that no further resources were planned for Local Government, means that a well-run Council like ourselves is only able to deliver a balanced budget, by agreeing to both a maximum increase in Council Tax and ASC precept, and significant impact on the services we deliver, or the amount our citizens pay for them in addition to Council Tax.
This impact is not sustainable on two fronts. The Local Government sector cannot continue without the allocation of additional resources. We, and other councils, may be able to set a legally balanced budget in 2024/25 with a material impact on services, but that is not sustainable in subsequent years. Additionally, it is unfair for the citizens of Coventry, which is an area with much higher-than-average deprivation levels, to continue to be charged more for a lower level of service, in addition to the already significant increase in the cost of living.
We all believe in Coventry that this situation can only ultimately be resolved by long-term funding reform which provides multi-year settlement certainty, as acknowledged by the government as far back as 2016. Ahead of that, we are calling on your department to assist, and would urge you to consider urgent top-up funding for social care and housing authorities in this year and next, particularly for those in more deprived areas.
We note Simon Hoare MP’s comment in delivery of the recent policy statement that his door is always open and welcomes comment on the settlement, so we would welcome a collective cross- party discussion on potential measures to help.