Adult Social Care Discharge Grant
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A grant for 2023/24 to facilitate reduced delays in discharges from hospital. The funding will be required to be pooled as part of the Better Care Fund and will be paid out using the existing Improved Better Care Fund grant shares.
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Adult Social Care Market Sustainability and Improvement Fund
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A grant ring-fenced for adult social care to support capacity and discharge. This incorporates the 2022/23 grant for Market Sustainability and Fair Cost of Care. It is allocated using the adult social care relative needs formula.
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Adult Social Care Precept
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Local authorities with responsibility for adult social care have flexibility to raise additional council tax above the referendum threshold. Funding raised through this additional ‘precept’ must be used entirely for adult social care.
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Affordable Homes Premium
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As part of the New Homes Bonus, affordable homes delivered in an area attract an additional £350 per unit on top of the standard Bonus grant.
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Area Cost Adjustment (ACA)
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A factor to reflect the differences in service cost delivery in different areas. The current ACA reflects differences in wages (the ‘Labour Cost Adjustment’) and differences in rateable values (the ‘Rates Cost Adjustment’) between local authorities across the country.
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Baseline Funding Level
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The amount of an individual local authority’s 2013/14 Settlement Funding Assessment provided through the local share of retained business rates income, updated for inflation
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Better Care Fund (BCF)
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A single pooled budget for health and social care services, based on a plan agreed between the NHS and local authorities.
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Business rates baseline
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The business rates baseline for each authority determined at the start of the 50 per cent business rates retention scheme in 2013/14, uprated in line with the small business rates multiplier each year.
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Business rates baseline funding level (BFL)
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The amount of the settlement funding assessment (SFA) provided through the local share of business rates.
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Business rates pool
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Under the business rates retention scheme local authorities are able to come together, on a voluntary basis, to pool their business rates. Top-ups and tariffs, as well as levies and safety nets are calculated at a pool-wide level. Pools have to be approved by DLUHC annually and are set out in the Local Government Finance Report.
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Business rates revaluation
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A regular exercise by the Valuation Office Agency, to reassess the rateable value of individual non-domestic hereditaments. The results are used to set new business rates bills. A revaluation on the basis of April 2021 values will come into effect in April 2023. The following revaluation is planned for April 2026.
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Central Share
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The percentage share of locally collected business rates paid to central government by billing authorities. In 2013/14 when business rates retention began this was set at 50 per cent. The central share is redistributed to local government through grants including the Revenue Support Grant.
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Core Spending Power
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The government’s measure of the core components of local government funding, comprising the Settlement Funding Assessment, assumed income from council tax (including the adult social care precept), New Homes Bonus, Rural Services Delivery Grant, grants for social care and the funding guarantee.
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Council Tax referendum principles
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These mark levels of council tax increases above which a local authority must hold a referendum which allows residents to approve or veto the increase. The comparison is made between the authority’s average Band D council tax level for the current financial year and the proposed average Band D for the next financial year.
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Dedicated Schools Grant
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The Dedicated Schools Grant is the principal source of funding for schools and related activities in England. It is a ringfenced grant paid to local authorities for maintained schools. School-level allocations are currently determined in consultation with the schools forum in each local authority area. From April 2017 has also included the ‘retained duties’ element previously paid as part of the Education Services Grant
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Devolution Deals
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Devolution Deals were introduced in 2014 and are a bespoke arrangement tailored to certain local authorities. They give local government greater powers and more autonomy over budgeting
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Equalisation of the Adult Social Care precept
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The process through which a proportion of Social Care Grant funding is used to take account of the impact of the distribution of the Adult Social Care council tax precept.
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Estimated Business Rates Aggregate
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The total business rates forecast at the outset of the Business Rates Retention system to be collected by all billing authorities in England in 2013/14, used to calculate baseline funding levels and business rates baselines in 2013/14.
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Funding Guarantee
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This is a grant for 2023/24 that ensures all councils have a minimum 3 per cent increase in Core Spending Power before any decisions about efficiencies, use of reserves and increasing the level of council tax.
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Improved Better Care Fund (iBCF)
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Additional funding for adult social care authorities from 2017/18 onwards that has to be included within the Better Care Fund plans.
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Levy
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A mechanism whereby any business rates retention gain above a certain level is paid to the Government. The levy rate cannot exceed 50 per cent of business rate retention gains.
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Levy account
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A Government account into which proceeds from the business rates levy, and any top-slice, are paid and which is used to pay safety net to qualifying authorities. Any surplus is to be returned to authorities.
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Local Share
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The percentage share of locally collected business rates retained by local government. This was set at 50 per cent at the implementation of business rates retention.
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(Business Rates) Multiplier
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The business rates multiplier when multiplied by the rateable value of a property determines a ratepayer’s business rate bill. There are two multipliers – one for small businesses and one for larger businesses. These are set nationally. Unless the Government decides to set a lower increase, the small business multiplier is uprated annually by the Consumer Prices Index and the other multiplier adjusted accordingly.
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New Homes Bonus (NHB)
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A grant paid to reward local authorities for the number of homes built and brought back into use. The level of funding for an area reflects additional housing supply in that area. For 2023/24 this will be paid for one year only. Previously it was paid for a number of years. Payments for qualifying years before the current one were referred to as legacy payments.
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Precept
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A council tax charge from local authorities which do not issue bills themselves. These include county councils, police and crime commissioners, fire and rescue authorities, the Greater London Authority, combined authority mayors, and town and parish councils. Billing authorities – usually shire district councils or unitary authorities – collect council tax on behalf of precepting authorities and pass the proceeds to them.
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Referendum Threshold
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A referendum threshold is an amount set by Central Government by which local authorities can increase council tax without needing to hold a referendum to seek approval from residents on the increase.
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Relative Needs Formula (RNF)
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A relative needs formula provides a way of assessing the relative need for a particular service or set of services across different local authorities. Relative Needs Formulas are used to estimate the relative funding requirement for each local authority in England and incorporate factors such as demography and deprivation.
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Revenue Support Grant
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A grant paid to local authorities as part of the Settlement Funding assessment (see below) which can be used to fund revenue expenditure on any service.
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Rural Services Delivery Grant
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A grant paid to the top quartile of local authorities on the basis of the super-sparsity indicator, in recognition of possible additional costs for rural councils.
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Safety Net
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A mechanism to protect any authority which sees its business rates income drop, in any year, by more than a given level below their baseline funding level. In 2023/24 this level is set at 7.5 per cent for authorities with 50 per cent business rates retention and 3 per cent for authorities with 100 per cent business rates retention.
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Section 31 Grant
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A grant paid to local councils under Section 31 of the Local Government Act 2003, under such conditions as the minister may determine. This mechanism is used to compensate local authorities for the costs of additional business rates reliefs announced by Government.
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Services Grant
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An unringfenced grant distributed using local authority shares of 2013/14 Settlement Funding Assessment, adjusted for local authority restructuring where necessary.
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Settlement Funding Assessment (SFA)
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This is a local authority’s share of the local government spending control total which will comprise its Revenue Support Grant for the year in question and its baseline funding level.
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Small Business Rate Relief
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Businesses with a property with a rateable value of £12,000 and below receive 100 per cent relief on business rates. Businesses with a property with a rateable value between £12,000 and £15,000 receive tapered relief.
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Social Care Support Grant
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A non-ringfenced grant for adult and children’s social care services.
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Top-Ups and Tariffs
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The difference between an authority's business rates baseline (the amount expected to be collected through the local share of business rates) and its baseline funding level (the amount of SFA provided through the local share). Tariff authorities make a payment and top-up authorities receive a payment. Tariffs and top-ups are uprated in line with the small business rates multiplier each year. In 2023/24 they have been recalculated so that authorities do not have gains or losses solely due to business rates revaluation.
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Under-indexing grant
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A grant provided by the Department of Levelling Up Housing and Communities (DLUHC) to compensate councils for the impact of the Government’s decisions to increase the business rates multiplier by lower than the Consumer Price Index (the Retail Prices Index before 2023/24) (so-called ‘underindexing’). This is intended to make sure that councils do not experience funding reductions as a result of this policy.
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Social care
The Government has confirmed the following grants for social care in the 2023/24 settlement:
LGA view: