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11th January 2022

Solace statement on latest IFS research

In response to the Institute for Fiscal Studies’ latest report, published today, about the impact of the pandemic on councils’ finances, Martin Reeves, Solace spokesperson for local government finance, said: “While council budgets might have held up better than expected during the first year of the pandemic this does not mean councils’ finances are in a strong position; far from it.

“It’s important to note that the research focuses on an atypical year in which demand across a swathe of services was artificially suppressed during various stages of lockdown. As with other public services, including the NHS, that pent-up demand – and much more – is now presenting itself, in particular in adults’ and children’s social care, and putting increased pressure on what are already stretched services, weary workforces, and constrained budgets. This demand, and the expenditure needed to meet it, was merely delayed, it was not removed from the system.

“At Solace we have enormous respect for the independent rigour of the IFS and this analysis demonstrates the vast majority of local councils have the expertise to manage complicated finances through exceptional circumstances, despite the short termism in the national system – councils have only just been told exactly how much money they will get in 2022-23. It provides more evidence that, like the rest of the world, UK local government should be given much more freedom and flexibility to manage their income and expenditure on local public services. That is why Solace is calling for a Commission to fundamentally review the way local government is financed.”