Lincolnshire County Council calls for urgent reform in “not fit for purpose” local government funding

Council leaders have branded local government funding “not fit for purpose,” claiming it misses out on £120m per year.

Lincolnshire County Council has warned that over 600 miles of its roads are considered poor or very poor due to a lack of funding, and says care and school transport costs are rising alarmingly.

The government has invited feedback on how the funding formula for councils could be reformed.

The county council’s scathing response says Lincolnshire residents are being left worse off as rural areas are neglected.

It comes as, on Friday, the authority agreed to raise its share of the council tax bill by 2.99%.

The council warned that the cost of transporting children to school across the sparsely populated county has doubled from £26m to £52m since the Covid pandemic.

The bill for adult social care has also surged by £120m in that time, leaving the county authority forced to make cuts or use its savings.

“Simply, the local government finance system is not fit for purpose,” the county’s recently published submission says.

“Lincolnshire County Council has consistently, for many years, received disappointing financial settlements, and this looks as if it will continue.”

“The funding formula currently used by the government to distribute grants sees LCC lose out on an estimated £120m per annum for our area each year, as the current funding method does not accurately reflect the costs of delivering rural services to sparsely populated areas.”

Lincolnshire County Council has made £380m in cuts since 2010.

“These cuts have significantly impacted local bus services, which, in a rural county, can make it extremely difficult for those without access to a car or other transport to go about their day-to-day lives,” the submission says.

“Lincolnshire has also seen cuts to our community police force.”

Short-term one-year settlements were also criticised as they make financial planning difficult for councils.

The letter says the authority has “historically been in a financially stable position, but reserves only go so far,” and it has been spending these on road repairs and delivering children to school.

It warns that with increasing numbers of councils effectively declaring bankruptcy, “something has to be done to reform the system.”

The cross-party Housing, Communities, and Local Government Committee will continue looking into how local government funding – worth £120bn per year – should be reformed.

The Labour government says councils have been badly funded by the previous administration, and changes are needed.

A variety of councils, public bodies, charities, and experts are being asked to give evidence.

Hearings on this are set to continue next month, although there is no date on possible reforms.