Councils’ deficit hits £4bn
Author: Public Finance - Aug 11, 2009
Town halls have reported a £4bn financial hole caused by an ongoing ‘perfect storm’ of falling revenues and increasing demand for services.
Figures published today by the Local Government Association show that councils in England have been losing out on almost £11m every day this year compared with 2007/08.
The survey also suggests that low interest rates and the property market slump are hitting local authority finances.
LGA vice-chair Sir Jeremy Beecham said: ‘Town halls are being hit by a perfect storm.
‘Councils are feeling the effect of recession in exactly the same way as hard pressed homeowners and families.
‘Low interest rates mean councils are much less able to rely on their savings, plummeting house and land prices have hit hard and income from leisure centres and a range of other services has fallen.’
He pointed to innovative measures councils are taking to help their communities through the recession. This included Essex County Council setting aside £50m for loans to small and medium-sized businesses.
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