On behalf of its membership, the cross-party LGA regularly submits to Government
consultations, briefs parliamentarians and responds to a wide range of parliamentary inquiries. Our recent
responses to government consultations and parliamentary briefings can be found here.
Prior to the Spending Review, the LGA estimated that councils faced cost pressures of £2.6 billion in each year up to 2024/25, to keep services at their 2019/20 levels of access and quality – without addressing any pre-existing pressures.
The local government finance settlement is the annual determination of funding to local government from central government. This briefing covers the provisional settlement for 2022/23. We expect the final 2022/23 settlement to be laid before the House of Commons, for its approval, in late January or early February 2022.
In our view, the revised code as drafted exceeds this brief of determining how much a council can afford to borrow. The proper place for detailed guidance on local authorities’ investments is the Government’s statutory guidance on local government investments, which itself is another part of the Prudential Framework for local authority capital finance.
Overall, we have significant concerns with the proposed changes to the Prudential Code and these are outlined in our response to the consultation on that. We are equally concerned at how those changes interact with and impact on the Treasury Management Code. In particular we are concerned that activity that is currently seen as good practice in Treasury Management will be restricted to the detriment of councils’ finances.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill legislates to ensure that COVID-19 cannot be taken as a cause of material changes of circumstances for business rates and makes provision in connection with the disqualification of directors of companies that are dissolved without becoming insolvent. We welcome the provisions in in the Bill.
Local audit and local auditors need to be adequately skilled and have an adequate understanding of local government. It also needs to focus on areas that add value rather than on work that is not a priority for local government. It has previously been highlighted (for example in the report of the Redmond review) that many believe that the current focus on asset and pension valuations is inappropriate.
Property continues to provide a good basis for a local tax on business. Business rates is efficient to collect and has been relatively predictable and buoyant in recent years. However, the changing nature of business alongside the nature of demand pressures on councils means that we cannot look to business rates to form such a substantial part of local government funding in the future and alternative means of funding councils will be needed instead of or as well as a reformed business rates system, of which one example is a tax on online businesses.
The consultation and its proposals are wide ranging. In our response we will only comment on aspects of the consultation document that are of direct interest to local government.