Resetting the relationship between local and national government. Read our Local Government White Paper

Growing Places: foundations for change

For local government to maximise its potential, it needs solid financial foundations. This includes Government plugging the £5.8 billion funding gap by the end of the decade and giving local government the fiscal levers – such as full business rate retention and control over council tax.

We're calling on the Government to:

  • address the £5.8 billion funding gap faced by local government by 2020
  • provide £1.3 billion to stabilise the adult social care provider market
  • review local authority relative needs and resources and refresh the methodology used to distribute funding between individual local authorities
  • offer a multi-year settlement to cover funding up to the point when local government finance reform is introduced.
  • allow areas to retain a proportion of nationally collected taxes paid by their residents, such as income tax or stamp duty, along with appropriate redistribution arrangements and control over discounts and reductions where appropriate
  • devolve power over localised taxes to empower local politicians, as leaders of places, to decide priorities for how money is spent by, and in partnership with, local public service providers and commissioners currently under central government control
  • give areas the freedom to collect current local taxes differently to support local priorities, or introduce new ones, such as a tourist tax.
  • modernise business rates to ensure that sectors such as online businesses make a fair contribution and that councils are given maximum flexibility on reliefs
  • tackle avoidance effectively by giving local authorities powers over granting currently mandatory reliefs where avoidance is strongly suspected, such as abuse of charitable relief and empty property relief
  • implement a fair system of challenging and appealing valuations with clear time limits, such as the six month time limit in Scotland
  • modernise and digitise the assessment and collection systems to deliver efficiencies across the whole of government and preserve local government autonomy
  • move toward a model of valuation that reduces the potential for drastic changes to bills and local authority income as a result of major revaluations.
  • abolish council tax referendum limits to bring council tax in line with other taxes in the United Kingdom which are not subject to referenda
  • remove restrictions around eligibility for council tax support to rectify the challenges around intergenerational fairness and sustainability of support packages
  • allow councils to vary council tax discounts to make sure it is fair to everyone according to local circumstances and helps achieve shared goals and priorities.


Download the full publication Growing places: building local public services for the future to learn more.