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Liverpool City Region Leaders Urge Government to Address Inflation Pressures on Local Authorities

Strategic Insights

— 1 min read

Liverpool's Mayor, Joanne Anderson, and the city region's leaders have written a joint letter to the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, to highlight the increasing financial difficulties faced by local authorities due to rapidly rising inflation rates. The city region's leaders are calling on the Government to take action to provide adequate national support to prevent local authorities from being forced to cut essential services and support for vulnerable residents.

Key Takeaways:

  • The Liverpool City Region is facing enormous financial difficulties due to inflation rates exceeding 7.8% in 2022, significantly higher than the 3% forecast at the end of 2021.
  • The region's local authorities may face unbudgeted costs of up to £2 billion as a result of inflation, with estimates suggesting that this impact could exceed £100 million in 2022/23.
  • The city region's leaders are concerned about the impact of inflation on vulnerable residents, who are already struggling to afford their basic needs.
  • Local authorities are facing significant extra costs due to increases in the price of raw materials, labour, and services, making it challenging to provide essential public services.
  • The city region's Councils have been under immense pressure since the COVID-19 pandemic and are now facing enormous challenges in delivering services due to inflation and austerity.
  • The region's leaders are urging the Government to provide additional support to address the financial pressures faced by local authorities, ensuring that the inflationary pressures are properly funded as an immediate priority.

Statistics:

  • Inflation rate in 2022: 7.8%
  • Unbudgeted costs for local authorities in England: up to £2 billion
  • Estimated impact on the Liverpool City Region's local authorities: over £100 million in 2022/23
  • Number of local authorities in the London City Region: 6
  • Funding cuts between 2010-2020: over 28% of funding lost, equating to a cut of £336 for every resident
  • Average funding cut per resident in England: almost half the amount experienced in the Liverpool City Region

Sources:

  • Letter from Liverpool City Region leaders to the Secretary of State for Levelling Up, Housing and Communities (exact date not specified)
  • Office of Budget Responsibility (OBR) forecasts for inflation (May 2022)
  • Institute for Government estimates for local authority unbudgeted costs (no specific date mentioned)
  • Autumn Budget and Spending Review 2021 Statement (October 2021)
  • Provisional Local Government Finance Settlement uprated grant funding (December 2021)
  • Local Government Finance Settlement 2022/23 (March 2022)

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