Three headlines from NLGN’s latest Leadership Index

The latest NLGN Leadership Index paints a stark picture of local government’s capacity to weather the current challenges facing the sector and those on the horizon. Our regular survey of chief executives, leaders and council mayors voices concerns from across the UK for core public service delivery amidst councils’ diminishing confidence in their powers and resources to meet demand. It also finds that 2019 could bring a near universal rise in council tax and points to the risks of the fallout from a possible ‘no deal’ Brexit.

The increasing strain on social care
Our findings confirm repeated warnings that social care services are struggling in a context of growing demand and a combined funding gap of £6.5 billion by 2025 across both children’s services and adult social care. After eight years of persistent cuts, councils are voicing decreasing confidence in their powers and resources to meet the needs of social care services.

In adult social care, levels of confidence have declined dramatically over the last eight months – by 16 per cent from a low starting point of just 41.5 on a scale of 1 (lowest) to 100 (highest). The decline is even greater in social care providing councils alone, with a decline of 21 per cent over the same eight-month period.

Confidence in the powers and resources to deliver children’s services scored 43.4 in March 2018 on the same scale of 1 to 100. The decline in confidence to meet the needs of these services has been even steeper over the last eight months: an 18 per cent decrease across all councils and 24 per cent in social care providing councils alone.

Council tax rises on the horizon
In light of these service delivery pressures, it’s perhaps no surprise that 96.8 per cent of councils are expecting to increase council tax next year. Local authorities have been left with little choice but to ask residents to foot the bill to deliver these services, as councils grapple with the consequences of a near 50 per cent fall in central government funding since 2010.

Indeed, when asked about the leading cause of financial pressure behind these projected council tax rises, most respondents (57 per cent) reported the reduction in central government funding to local government. In second place was social care, with nearly a third of council leaderships reporting this as the leading cause of financial pressure (21 per cent cited children’s services and 10 per cent adult social care).

The likely fallout of a Brexit ‘no deal’ settlement
While next spring looks set to bring council tax rises, the prospect of a Brexit ‘no deal’ settlement hangs heavy over March 2019. An already financially stretched local government sector predicts rising costs across vital local services, including those that support the most vulnerable. Asked about the potential costs of a ‘no deal’ settlement, 46 per cent of council leaderships expect adult social care to face the highest rise and over a quarter foresee economic development facing the greatest costs. When we probed deeper into the issues surrounding a ‘no deal’ settlement, recurring themes included: uncertainty and volatility; risks to community cohesion; and damaging implications for businesses, investment and workforce.

These findings set a greater urgency for action from the Government ahead of next week’s Budget. The Prime Minister has promised an end to austerity and a £20.5 billion birthday present for the NHS, but it remains to be seen how local government will fare. The services it provides play a critical role in preventing people from needing the NHS in the first place – from the impact of social care on the capacity of health care systems to the role of economic development or housing in shaping a population’s health. Concerningly, it is areas such as these that our Leadership Index demonstrates are bearing the brunt in the current climate.

NLGN Leadership Index October 2018 reflects deep concerns within the sector and provides a bleak outlook for the months ahead. If councils are left to weather a storm of high demand, financial pressures and the uncertainty of Brexit, demand for the NHS – and other centrally-funded services – will only rise further and faster. The Treasury would be wise to heed the warnings of council leaderships and address the funding gap facing local services across the UK.

To read the findings in full, you can download the full NLGN Leadership Index October 2018 here.

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