HQN Blog: Spring forward – Let's get behind the lead story in today's Financial Times

What is the future for councils? Is it the end of the road? Of course not! Our event moves on from describing the problem to grappling with solutions.

The Financial Times' front-page stark headline today is – English councils face cash crunch as cuts and social care costs bite.

Rob Whiteman, the Chief of CIPFA and our speaker on Mayday, is quoted as warning – If reserves fell and an emergency “suddenly rears its head” a council’s financial stability could “come unstuck.”

Jonathan Carr West, Head of the Local Government Information Unit, spelled out the dangers of “using reserves on an annual basis to fund services.”

Bluntly, when they’re gone, they’re gone!

Back in the day Eric Pickles ordered councils to run down their reserves to keep going. We put out a briefing at the time pointing to the obvious risks. It said:

“Perhaps the least prudent use of balances would be to use them to fund ongoing expenditure, without a firm plan to end such use. This does, on the face of it, appear to be the implication of the DCLG press release cited earlier. Clearly, whatever the level of balances, they are finite, and will eventually be exhausted, requiring savings to be made at that point.”

But that’s in the past. What should councils and those that work with them do now? That’s what we will be examining on the 1st of May. It would be good to see you and hear your ideas too. This lack of cash for services is bound to be a big deal at the local elections.

Today’s graph from the FT says it all about the task in hand:

Council reserves

By Alistair McIntosh, HQN Chief Executive

For more on this subject, and hear from our exciting line-up of speakers as they discuss possible solutions to this issue, be sure to come to HQN's 'Spring forward – big decisions for the bottom line' event in London on Tuesday 1 May 2018. Further details can be found here.