Labour under pressure to fix local services in budget as councils insist there is no more ‘fat to cut’
Folkestone has been drawing in crowds in recent years with regeneration and private developments transforming parts of this port town on the Kent coast.
But many residents will tell you that the fabric of this community is being torn apart. Local services are deteriorating and have been for some time.
Leisure centres have shut down and Kent County Council recently closed most of its 50 youth clubs.
The local library has been closed for two years because it has fallen into disrepair and the local council says it can’t afford to repair it. Instead, a makeshift library has been set up across the road, in what was once a youth centre.
It’s not a unique story. Across the country, local authorities have seen their budgets slashed over the past decade.
Since 2010, central government has cut its grants, forcing local councils to raise more council tax. That hasn’t been enough to make up the shortfall, with total spending power plummeting by 26% over the past decade.
At the same time demand for core services, mainly adult social care, has soared, meaning councils are trying to deliver more for less.
Unsurprisingly, non-critical services have been the first to go.
Residents of Folkestone say they’ve had enough and expect the new Labour government to make good on its promise to fix their local services.
In Folkestone, volunteers are helping keep the town centre tidy because the local council does not have the resources.
Matthew Jones, a local campaigner, said: “Libraries are not just a place where you borrow books. It’s the centre of a community… where people come, people who are not only unemployed but students too, a place where they can actually find somewhere warm and safe to study with people around them who can help them.”
Kent County Council had to make £90m of savings last year and is now looking to make another £85m.
Along with closing down services, the council is selling its headquarters, a listed building it has called home for more than 100 years because it can no longer afford to maintain it.
Peter Oakford, the council’s deputy leader, said there was no more “fat to cut”.
“We feel for the residents… because of the position we are in we are asking people to pay more for less services. Until the government fully fund social care so the council can fund other areas of non-discretionary business that we support residents with, we’re going to be in this same position.”
Peter Oakford, Kent County Council’s deputy leader, says there is no more “fat to cut” from their budget.
Local authorities, along with other unprotected budgets such as courts and prisons, have borne the brunt of cuts since 2010 as central government sought to prioritise funding for the NHS and schools.
The problems have reached breaking point at a number of local authorities and one in four councils in England say they are likely to have to apply for emergency government bailout agreements to stave off bankruptcy in the next two financial years, according to a new survey by the Local Government Association (LGA).
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A separate report by the union Unison found that local authorities are grappling with a £4.3bn black hole in their budgets next year, which will rise to £8.5bn the following year.
The chancellor is under pressure to find extra money for local councils in her budget next week but she is grappling with spending demands across the public sector.
Rachel Reeves maintains that this type of day-to-day spending can only be covered through taxation, but the government has promised it will not raise income tax, national insurance or VAT.
This means the chancellor has a difficult balance to strike.
Politics
Keir Starmer says closer EU ties will be good for UK jobs, bills and borders ahead of key talks
Sir Keir Starmer has said closer ties with the EU will be good for the UK’s jobs, bills and borders ahead of a summit where he could announce a deal with the bloc.
The government is set to host EU leaders in London on Monday as part of its efforts to “reset” relations post-Brexit.
A deal granting the UK access to a major EU defence fund could be on the table, according to reports – but disagreements over a youth mobility scheme and fishing rights could prove to be a stumbling block.
The prime minister has appeared to signal a youth mobility deal could be possible, telling The Times that while freedom of movement is a “red line”, youth mobility does not come under this.
His comment comes after Kaja Kallas, the EU’s high representative for foreign affairs, said on Friday work on a defence deal was progressing but “we’re not there yet”.
Sir Keir met European Commission president Ursula von der Leyen later that day while at a summit in Albania.
Ursula von der Leyen and Sir Keir had a brief meeting earlier this week. Pic: PA
If agreed, the deal will be the third in two weeks, following trade agreements with India and the US.
Sir Keir said: “First India, then the United States – in the last two weeks alone that’s jobs saved, faster growth and wages rising.
“More money in the pockets of British working people, achieved through striking deals not striking poses.
“Tomorrow, we take another step forward, with yet more benefits for the United Kingdom as the result of a strengthened partnership with the European Union.”
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Conservative leader Kemi Badenoch has said she is “worried” about what the PM might have negotiated.
Ms Badenoch – who has promised to rip up the deal with the EU if it breaches her red lines on Brexit – said: “Labour should have used this review of our EU trade deal to secure new wins for Britain, such as an EU-wide agreement on Brits using e-gates on the continent.
“Instead, it sounds like we’re giving away our fishing quotas, becoming a rule-taker from Brussels once again and getting free movement by the back door. This isn’t a reset, it’s a surrender.”
Moody’s credit rating agency downgraded the credit rating of the United States government from Aaa to Aa1, citing the rising national debt as the primary driver behind the reduction in creditworthiness.
According to the May 16 announcement from the rating agency, US lawmakers have failed to stem annual deficits or reduce spending over the years, leading to a growing national debt. The rating agency wrote:
“We do not believe that material multi-year reductions in mandatory spending and deficits will result from the current fiscal proposals under consideration. Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat.”
The credit downgrade is only one degree out of the 21-notch rating scale used by the company to assess the credit health of an entity.
Despite the negative short to medium-term credit outlook, Moody’s maintained a positive outlook on the long-term health of the United States, citing its robust economy and the status of the US dollar as the global reserve currency as strengths, reflecting “balanced” lending risks.
Related: Asia’s wealthy shifting from US dollar to crypto, gold, China: UBS
Investors react to Moody’s US credit revision
Moody’s announcement drew mixed reactions from investors and market participants, leaving many unconvinced by the agency’s revised outlook.
Gabor Gurbacs, CEO and founder of crypto loyalty rewards company Pointsville, cited the rating agency’s previous credit assessments during times of financial stress as unreliable, signaling that the outlook was too optimistic.
“This is the same Moody’s that gave Aaa ratings to sub-prime mortgage-backed securities that led to the 2007-2008 financial crisis,” the executive wrote in a May 17 X post.
However, macroeconomic investor Jim Bianco argued that the recent Moody’s credit outlook does not reflect a real downgrade in the perception of US government creditworthiness and characterized the announcement as a “nothing burger.”
US government debt surpassed $36 trillion in January 2025 and shows no signs of slowing, despite recent efforts by Elon Musk and others to reduce federal spending and curtail the national debt.
As the debt climbs and investors lose faith in US government securities, bond yields will spike, causing the debt service payments to go up, further inflating the national debt.
This creates a vicious cycle as the government will have to entice investors with ever-greater yields to incentivize them to purchase government debt.
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Politics
Scotland’s former first minister Humza Yousaf hits out at Starmer’s ‘dog whistle’ stance on immigration
Former Scottish first minister Humza Yousaf has attacked Sir Keir Starmer for his “dog whistle” stance on immigration after the prime minister said the UK risked becoming an “island of strangers”.
In a piece penned by Mr Yousaf for LBC, the former leader of the Scottish National Party (SNP) repeated claims the prime minister’s recent remarks on immigration were a “modern echo” of Enoch Powell’s infamous 1968 Rivers Of Blood speech.
The prime minister stirred controversy earlier this week when he argued Britain “risked becoming an island of strangers” if immigration levels were not cut.
After many MPs criticised his language, Sir Keir rejected the comparison to Powell, with his official spokesperson saying migrants have made a “massive contribution” to society but his point was that the Tories “lost control of the system”.
File pic: PA
In the LBC piece published on Saturday, Mr Yousaf said: “Powell’s 1968 speech warned of immigration as an existential threat to ‘our blood and our culture’, stoking racial panic that led directly to decades of hostile migration policies.
“Starmer’s invocation of ‘strangers’ is a modern echo – a dog-whistle to voters who blame migrants for every social ill, from stretched public services to the cost-of-living crisis.
“It betrays a failure to understand, or deliberately mask the fact that Britain’s prosperity depends on migration, on openness not building walls.”
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Starmer’s speech divides opinion
Read more:
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Sir Keir made the comments at a news conference in which measures were announced to curb net migration, including banning care homes from recruiting overseas, new English language requirements for visa holders and stricter rules on gaining British citizenship.
The package is aimed at reducing the number of people coming to the UK by up to 100,000 per year, though the government has not officially set a target.
The government is under pressure to tackle legal migration, as well as illegal immigration, amid Reform UK’s surge in the polls.
Mr Yousaf concluded his article saying the UK was “on the brink of possibly handing the keys of No 10 to Nigel Farage”.
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