LGA responds to Local Government Finance Settlement

Cllr James Jamieson, Chairman of the Local Government Association, responds to the provisional Local Government Finance Settlement published today.

Five pound note

“The LGA is pleased that the Government listened to our call for the publication of this settlement before Christmas which gives councils much of the certainty they need about how local services will be funded next year.

“It indicates that core spending on vital local services has the potential to increase by £2.9 billion next year, which is good news for councils and shows that the Government has responded to the financial pressures local authorities face in meeting rising costs and demand for services, such as adult and children’s social care and homelessness support.

“The further addition of £780 million to the high needs block of dedicated schools grant to fund the rising costs of meeting special educational needs brings the total of potential additional resources to over £3.5 billion as announced in the Spending Round.

“This includes £1 billion government funding for social care, which will help ensure councils can continue to help older and disabled people live more independently and support our most vulnerable young people. Confirmation that key grants will also continue next year provides much-needed stability for local authorities.

“The ability of councils to increase council tax and levy an adult social care precept next year gives them the potential to raise £1.6 billion but this is not a sustainable solution. Increasing council tax raises different amounts of money in different parts of the country, unrelated to need, and adds an extra financial burden on households. The Government needs to follow through on its pledge bring forward proposals for long term reform of adult social care and how it is funded. The LGA has reiterated its offer to host cross party talks to take this work forward.

“The Government needs to work closely with councils during its review of the New Homes Bonus and provide clarity to councils on the outcome, including whether remaining legacy payments will continue beyond 2020, as soon as possible to allow them to plan their 2021/22 budgets and beyond. It is also vital that councils are fully funded for the loss of income due to increases in business rates reliefs, in line with normal government practice.

“This is a positive year-on-year real terms increase in spending power for local government and crucially provides new money for 2020/21. Our call for long-term sustainable funding remains, but today’s provisional settlement reflects the work the LGA has done with councils to demonstrate that investing in local government is good for people’s health and wellbeing, including tackling inequalities in our communities, and the nation’s prosperity and economic growth.

Councils are government’s vital partners in driving improvement in people’s lives across the whole country.