The outlook for councils’ funding: is austerity over?

The outlook for councils’ funding: is austerity over? This analysis shows that, with councils now largely dependent on council tax and business rates to fund their spending, a growing gap is likely to open up between their income and what they need to meet the rising costs of service provision, especially for adult social care. With council tax rising in line with inflation (two per cent a year), by the end of the parliament councils will need an extra £4 billion a year from the government just to maintain social care services at current levels and stop further cut backs in the share of national income spent on other services like children’s social care, public health and housing. This would rise to £18 billion a year by the mid-2030s. Institute for Fiscal Studies