SIGOMA Chair talks to FT on exceptional financial support scheme

Posted on February 28, 2024

Cllr Sir Stephen Houghton, Chair of the Special Interest Group of Municipal Authorities (SIGOMA)

The current scheme of exceptional financial support for local authorities will not provide a long-term solution, solve the current systemic issues in local government finance or stop councils from having to make severe cuts in services. The sale of capital assets to pay for day-to-day spending is not sustainable and is in many ways a bridging loan than will pass the costs to future tax payers and defer problems of underfunding and growing funding gaps to future years. There is also a risk that valuable publicly owned assets could be sold below market value.

However, many councils have been left with no choice but to apply for exceptional financial support as it is the only route to a balanced budget and avoiding having to issue a Section 114 notice following a decade of cuts from central government and rapidly rising demand on services. The long-term solution to the funding crisis in local government is a fair and sustainable settlement for councils that closes the funding gap and distributes funding on a needs-basis.

Read the full piece in the FT, here.