Many councils remain at a tipping point

By Lord Porter | 09 January 2018

This year looks set to be another busy and challenging one for local government.

We continue to push the Government to provide more new funding for all councils – as we have done in previous years – in the final Local Government Finance Settlement, due out in the next month.

While only some of the much needed new money for councils was included in the provisional settlement, this is the only way to help plug the growing funding gaps facing our local services.

The settlement does allow councils to increase their core council tax by an additional 1% in the next financial year, without a local referendum. This is a flexibility that will give some councils the option to offset some of the financial pressures they face in the next year.

But we continue to call for the referendum limit to be abolished entirely so that councils and their communities can decide how your under-pressure services are paid for.

We also remain clear that this is not a sustainable solution to tackling the £5.8bn funding gap facing local government by the end of the decade. Years of unprecedented central government funding cuts have left many councils beyond the point where council tax income can be expected to plug the growing funding gaps they face.

The provisional settlement included a formal consultation on a review of relative needs and resources with the aim of implementing a new system in 2020/21. The Government is also aiming for councils to retain 75% of business rates from 2020/21.

This represents some progress on other financial and funding issues but we want to see all of that extra income go towards meeting the funding gap. No council should see its funding reduce as a result of a new distribution system.

Finally, the Government accepted our calls to avoid further changes to the New Homes Bonus.

We continue to call for the funding issues facing council services to be addressed. Many are at a tipping point, and pressures are particularly acute in children’s services, adult social care and our work to tackle homelessness.

Lord Porter is chairman of the Local Government Association

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