2019-20 technical settlement consultation response

The LGA is here to support, promote and improve local government. We will fight local government's corner and support councils through challenging times by making the case for greater devolution, helping councils tackle their challenges and assisting them to deliver better value for money services.

Key points

  • The LGA welcomes the Government’s intention to continue with the four-year settlement to which 97 per cent of all local authorities signed up.  However, local authorities are now facing rises in pay and prices, which were not forecast when local authorities signed up to the four year offer. 
  • Local services are facing a £7.8 billion funding gap by 2025 and solving this issue requires bold decisions from the Government. This could be through 100 per cent business rates retention, with the difference between that and 75 per cent retention being used to meet the funding gap.
  • 2019/20 is a particularly challenging year for councils with a projected funding gap of £3.8billion which includes £1.5bn to improve the financial sustainability of the care market. This assumes councils deliver all planned savings in 2018/19.
  • Local government is concerned that there is no clarity over funding levels, both nationally and locally, after March 2020. This hampers meaningful financial planning at a time when government grant funding is the lowest it has been for decades.
  • The LGA has consistently argued against the principle of council tax referenda for any local authority. Referendums on council tax are an unnecessary and costly burden. Council tax should be a local decision and councils should be held accountable through the normal mechanism of the ballot box. If the Government does still introduce principles, adult social care authorities which cannot increase the adult social care precept further and fire and rescue authorities are likely to make a particular case for additional flexibility. There is also a case for districts in two tier areas to be able to raise a ‘prevention precept’ to be used alongside the adult social care precept.
  • Those authorities affected by ‘negative RSG’ will welcome the Government’s proposal to cancel the tariff/top-up adjustment in the 2019/20 settlement, meaning the ‘negative RSG’ will be paid for from central government resources.
  • We would urge the Government not to increase the New Homes Bonus threshold again. This would risk putting the brakes on housebuilding schemes and growth-boosting projects at a time when our housing shortage is one of the biggest challenges facing the nation and it would further exacerbate the financial challenges facing some councils.