Councils 'close to the edge', Local Government Association chairman says

A dozen councils are on the brink of financial failure, the Local Government Association has told the BBC.

The association's chairman, Lord Porter, said it was working to "help prop them up".

The Conservative peer said: "We know we've got probably 12 or 14 councils that are very close to the edge now."

The government said councils had £22bn in their reserves and had to play their part along with the rest of the public sector in tackling the deficit.

Councils are not allowed to run deficits. The LGA declined to reveal which councils were affected.

Chancellor George Osborne has asked government departments to draw up plans for cuts of 40% and 25%.

'Better ways'

The LGA released to the BBC an analysis which said 40% cuts would leave councils £20bn worse off.

Lord Porter told BBC Radio 4's PM programme some councils "will be very close in the life of this Parliament to not being able to meet their statutory obligation to balance their budget".

He said: "We're not shroud-waving - we kind of know we need to do more and better and do it with less money - but we're saying there are better ways of doing things with less money than simply top-slicing some things out of local government."

A 40% reduction to core central government funding for councils in England and Wales would be worth £8.4bn while the same cut to separate local government grants would see a further £2.1bn lost, the LGA said.

Analysis

We're not shroud waving, says the Conservative boss who represents councils.

The language isn't pretty.

It's Whitehall jargon for organisations that issue blood-curdling warnings about the consequences of cuts as the chancellor draws up spending plans.

Some at Westminster are pretty cynical about such claims. They heard the same in 2010, as austerity began - they say - but money was saved and the bins were still collected.

If cuts forced councils to share facilities and run a tighter ship, all to the good.

Some councillors agree. They are proud some of their savings and don't doubt they can make some more.

They want - Lord Porter says - not lots more money spent overall, just more spent on them. Some extra health spending should go to local authorities, he says.

Like so many other in the public sector he warns the Treasury that having cut so far, a further 40% will hurt.

Councils insist the era when they could slash spending without voters noticing is long gone.

Lord Porter also described ring-fencing the NHS budget as a "mistake".

Separately, another Conservative council leader said he would have to close every service he was not legally obliged to provide if 40% cuts were made.

Every public library in Cambridgeshire could be closed, said the county council leader Steve Count, and he would still be short of money.

Cllr Count said: "If the government comes up with 40% cuts over the next five years the discretionary services will all but disappear, the roads will decay, and then we will struggle, we will really struggle with services to the vulnerable."

He said the council was saving money sharing its back office functions with Northamptonshire County Council. It now intends to turn off many street lights after midnight and is considering gritting fewer roads to save more cash.

A spokesman for the Department for Communities and Local Government said: "Councils have worked hard over the past five years to deliver a better deal for local taxpayers, keeping council tax down while public satisfaction with services has been maintained.

"However, like the rest of the public sector, they have to play their part in tackling the deficit and there is over £22bn currently sitting in council reserves.

"No decisions have been announced about local government funding beyond the financial year 2015-16."