LGA responds to provisional 2021/22 Local Government Finance Settlement

"More than 85 per cent of the potential core funding increase next year is dependent on councils increasing council tax by up to 5 per cent next year."


A five pound note

Responding to the provisional Local Government Finance Settlement for 2021/22, Cllr James Jamieson, Chairman of the Local Government Association, said:

“It is good to see that today’s provisional settlement provides extra money to meet COVID-19 costs, new funding for adult and children’s social care and for councils with responsibility for services such as homelessness, planning, recycling and refuse collection which will help meet cost and demand pressures next year. There is also the potential to increase council core spending power by up to 4.5 per cent in 2021/22 to support vital local services.

“However, more than 85 per cent of the potential core funding increase next year is dependent on councils increasing council tax by up to 5 per cent next year. This leaves councils facing the tough choice about whether to increase bills to bring in desperately needed funding to protect services at a time when we are acutely aware of the significant burden that could place on some households.

“The ability to bring in extra council tax remains a sticking plaster and not a long-term solution. It falls short of the sustainable long-term funding that is needed to improve the services our communities and local economies will need to recover from the pandemic.

“Councils also need clarity and certainty about how all local services will be funded over the next few years and beyond. Next year we need a three-year settlement and meaningful progress towards a long-term, sustainable solution to the funding crisis our adult social care services continue to face. There must be no further delays to the process of reform.

“The Government should also use its review of business rates to determine the future of the tax - which accounts for around a quarter of all council spending power - and shift attention towards developing new sources of finance for councils and different ways of incentivising growth.