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Daily Mail
29-05-2025
- Business
- Daily Mail
Less than one-third of senior council figures say Labour can be trusted as optimism about Keir Starmer's Government plunges in town halls
Less than one-third of senior council figures think Labour can be trusted as optimism about Sir Keir Starmer 's Government plunges in town halls, new research has shown. A survey found that only 31 per cent of senior council figures said the Government can be trusted, which was down from 52 per cent last year. It also showed that little more than a quarter (28 per cent) expected local government to be listened to, down from 55 per cent. And less than half (43 per cent) expected more power to be devolved to councils, down from 59 per cent. The survey, conducted by the Local Government Chronicle (LGC), suggested that Labour's honeymoon period since winning last July's general election is now over. The Prime Minister and Chancellor Rachel Reeves have made achieving economic growth their 'number one priority' since entering Downing Street. But less than one-third of respondents to the survey (32 per cent) expected the economy to be stronger in a year's time. This was down from 61 per cent in the LGC's previous survey in September last year. Across all questions relating to confidence in Sir Keir's Government, the LGC found opinions were consistently and substantially more negative than in September. One chief executive bemoaned how 'the much-hoped for revitalisation of public service provision has faded all too soon'. A director at a district council branded Labour's approach to local government as 'disappointing'. 'Like they see it as a problem that needs to be fixed without actually taking the time to understand what local government actually does or the challenges it faces,' they added. A frontline worker at a county council said: 'The demand is outstretching the funding in many areas. 'Population growth and growing demand do not seem to be considered. It means cuts to services and increased council tax for residents in order for councils to try and avoid going bankrupt. 'Residents are being asked to pay more and more and getting worse services / no services in return.' And a head of service in the North West said: 'The financial crisis and growth are clearly important, but otherwise they seem to lack a coherent approach and are not encouraging aspiration.' Deputy PM Angela Rayner is overseeing a shake-up of local government as she seeks to abolish two-tier council areas by merging district councils into larger unitary authorities. But the survey found opinions on Ms Rayner had become considerably more negative. Only 35 per cent said they were confident the Deputy PM understands local government, down from 47 per cent. Less than one-third (30 per cent) said they were confident she is trustworthy, down from 44 per cent. The same proportion (30 per cent) said they were confident Ms Rayner would champion local government in Whitehall, down from 49 per cent. And only 27 per cent said they were confident the Deputy PM would engage and consult local government on policy development, down from 48 per cent. A respondent from the East Midlands said: 'The Government should be addressing the financial viability of local government before embarking on local authority reorganisation.' The LGC received just over 300 responses to their online survey between April and May. Almost a quarter were chief executives, directors or heads of service at councils, while 14 per cent were councillors. One-fifth were managers, 25 per cent had some other role and 7 per cent described themselves as frontline staff. Over 70 per cent of respondents were employed by councils and the rest were from central government, combined authorities and the private sector who work closely with local government. The Ministry of Housing, Communities and Local Government has been contacted for comment.
Telegraph
04-04-2025
- Business
- Telegraph
Cash-strapped councils to cut gold-plated pension contributions
Cash-strapped councils will pay less towards gold-plated pensions next year in a move that could save ratepayers millions, experts say. Almost £1 in every £4 raised in council tax is currently spent on funding the generous schemes, with some local authorities forced to contribute more than a quarter of workers' salaries. However, the level of contributions required will fall for most local authorities from next April, according to actuary firm Hyman Roberts. A 2pc cut would save Birmingham City Council, which effectively filed for bankruptcy 18 months ago, almost £3m a year. It comes as council tax was hiked by an average of 5pc for the new financial year, with almost half of properties in England now facing bills of at least £2,000. Council retirees receive a guaranteed income for life, which rises each year with inflation. Their pensions are part of the Local Government Pension Scheme, which has more than six million members from a range of employers in 86 locally administered funds. Funds are valued every three years before employers are told how much they must pay towards pensions, with the next round across England and Wales currently in progress. Local authority budgets have been crippled by rising costs in recent years, but the average contribution was still 21.1pc of pay at the previous 2022 valuation – and some councils pay considerably more. Birmingham City Council currently pays contributions worth 27.2pc of salaries at a cost of over £142m a year – despite being forced to make £150m in cuts elsewhere. Speaking at the Local Government Chronicle's Investment Seminar, Robert Bilton, whose firm Hymans Robertson worked on around a third of valuations in the latest round, said: 'Pretty much all the local authorities are seeing a reduction in contributions. 'The Local Government Pension Scheme was in a really strong funding position at 2022, and nothing that has happened since then has really diminished that. 'Employers that are paying a relatively lower range will see a relatively smaller reduction, maybe 1pc of pay per annum for the next three-year cycle, whereas it's much larger for the employers who are paying higher rates.' The Local Government Pension Scheme was judged to have an overall surplus of £22.1bn at its 2022 valuation, but 26 schemes still didn't have enough money to pay their pensions long term. According to pension consultants Isio, however, the surplus had grown to £85bn by January this year. Just four schemes remained in deficit, opening the door for a reduction in contributions from April 2026. Joe Dabrowski, of the Pensions and Lifetime Savings Association, said he expected the strong funding position to lead to reduced employer contributions in many funds. He said: 'Obviously that might free up more cash for councils, which will then have more scope within their wider budgets to use the money for something else. 'Local authorities have been under pressure on their budgets because of increased demands, whether it's social care, reduced central grants or other things. This could be a shot in the arm for budgets for the time being.' More than 7,600 retired council workers receive pensions of more than £50,000 a year, an investigation by The Telegraph found. A final decision on pension contributions is expected later this year. The Local Government Association was approached for comment.
