Derbyshire council’s deputy says authorities face ‘incredibly challenging times’ after Autumn Budget

Cllr Simon Spencer, Deputy Leader and Cabinet member for Corporate Services and Budget, claims the Government has failed to address or support adult social care, special educational needs, the working wage and farmers after committing to the biggest tax increase in many years.

The council has stated that like many authorities it has been struggling due to reduced Government funding, the Covid-19 pandemic, inflation rates, rising costs, the cost of living crisis, and a growing demand on services as it works to address its own estimated budget deficit of around £40m for the current 2024-25 financial year.

Cllr Spencer said the impact of Chancellor Rachel Reeves’s decision to increase Employer National Insurance in the Autumn Budget announcement on October 30 will have big implications for those having to pay wages and for employees.

He added: “We are one of the biggest employers in the county so no doubt that will have a profound impact upon our authority and we have not heard any mitigation measures to address that and all the cost.”

As employers, including businesses and organisations, are now expected to pick up an increase in Employer National Insurance many are concerned this could have a knock-on effect with reduced pay increases for employees and workers.

The Labour Government has presented a budget plan based on borrowing and introducing £40bn of tax increases to be shouldered by businesses to support economic growth and investment to allow for better public services.

And although Cllr Spencer said he very much welcomes any planned investment towards the council’s budgets he says no indications have been given how any funding will be addressed and allocated.

The Conservative-controlled county council’s Leader, Cllr Barry Lewis, has also written to the Government to highlight the financial challenges faced in Adult Social Care with rising costs by every local authority nationwide as well as with child care placements which the council has argued need to be capped.

Cllr Spencer also said that the council does not yet know how much of a percentage of any funding will come to the council to help with Adult Social Care or for children with Special Educational Needs and Disabilities.

He added: “The problem is for the Government to understand the key issue faced by local authorities and the key issue is ever-rising costs and pressures and demands driven by people living longer and more children coming into care.

“It is something local authorities do not have the power to address. Unless that is dealt with local authorities will face incredibly challenging times.”

The Government has pledged £25bn for the NHS to reduce waiting lists and to support more appointments, £6.7bn for schools, roads and rail, and over £13bn for infected blood and Post Office scandal victims.

But Cllr Spencer has argued that the Government ‘throwing money at the NHS does not solve the problem’ because he believes it is like throwing money into a bottomless pit when what is needed is a reform programme.

And although the deputy council leader welcomes more funding for potholes he pointed out that Derbyshire has three-and-a-half thousand miles of highways with many other problems caused by landslips.

The Government has not increased fuel duty and it has extended a freeze on income tax thresholds and on taxing more on pensions but Cllr Spencer argues this will have to be paid elsewhere because he feels it adds an increase on taxes as wages come up so more taxes will have to be paid.

Chancellor Rachel Reeves outlined £40bn of tax increases to help support the NHS and to address what the current Labour Government claims is a £22bn blackhole left in the public finances by the former Conservative Government.

She raised spending by £70bn a year over the next five years with about half to be paid for by tax increases and the rest to be paid for with additional borrowing by altering Government debt rules.

But Cllr Spencer criticised what he says is the ‘biggest tax rise in history’ and he joined critics who fear this could lead to higher inflation, higher mortgage costs and eventually austerity.

He argued that if the cost of everything increases there will be increased costs upon providers and consumers and that requires bigger pay increases and that leads to inflation growth and the only way this can be controlled is to put up interest rates which affects mortgages resulting in austerity.

Cllr Spencer said: “Local authorities are the gatekeeper in the work we do to try and mitigate something before it happens.

“We are having to provide funding to mitigate our statutory services and there is little left to do preventative work.”

The Deputy Leader also expressed his disappointment at the Government’s decision to increase the single bus fare cap from £2 to £3 which he fears will have a profound effect on people already on a limited budget.

He is also very concerned that Government plans to increase Capital Gains Tax and Inheritance Tax will be felt deeply by the farming community and believes this is potentially the ‘biggest story from the budget’.

Cllr Spencer says farmers do not have a lot of money and in most cases their business is a family one handed down from generation to generation but if they get hit by Capital Gains Tax and Inheritance Tax death duties their land may have to be sold and that will also threaten food security for the country.

Ms Reeves said the Autumn Budget aims to restore economic stability and to rebuild public finances with a target of long-term growth but some councils are growing concerned about he future of some planned regeneration schemes.