Recession Causes Sharp Drop in Council Income
New figures show a £4bn deficit equivalent to losing £11m a day
New figures published today show that town halls have been hit by a £4bn deficit in income over the course of the last two years, currently equivalent to losing out on almost £11m every day in this year compared to financial year 2007/08.
Figures revealed by the Local Government Association, which represents over 350 councils in England, show that some key council income flows have been hit hard by a combination of the depressed property market and low interest rates.
Estimates based on the research show that in the last year, income from:
However, despite the squeeze on finances, LGA statistics also show that over the last six months:
Sir Jeremy Beecham, Vice-Chairman of the LGA, said, “Town halls are being hit by a perfect storm caused by the recession. Sources of income have dropped sharply at a time when more and more people are turning to councils to help them through tough times.
“Town halls 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.”
August 11, 2009