Briefings and responses

Our key point in responding to this consultation is that any transitional arrangements for 2023, whether part of the formal scheme or supplementary, should be announced no later than autumn 2022 when the draft list and provisional multiplier are announced. This is in order to make the process as smooth as possible for both ratepayers and billing authorities and allow time for any necessary software changes.

Local government needs a system that raises sufficient resources for local priorities in a way that is fair for residents and gives local politicians all the tools they need to be the leaders of their communities. For councils, it is also important that the tax system, including business rates, provides as much certainty as possible.

On the high streets, footfall is down over 43 per cent compared to the same period last year. Before the pandemic, footfall had dropped over 10 per cent in the last 7 years. Internet sales had risen 21 per cent of all retail sales from 7 per cent a decade earlier and during the pandemic had jumped to nearly 33 per cent of all retail sales.

Key messages The Government forecasts the total funding available for council services to be broadly similar in 2019/20 as it is today. In the first year according to the provisional Local Government Finance Settlement there is a fall in ‘core spending power' of 2.8 per cent. Without any increase in council tax there is a fall of 5.3 percent.

We agree that the current system for the payment of schools’ business rates could be rationalised, although something like the proposed system is currently used in some unitary authorities for maintained schools.  We also note that the proposed system would not alter the liability for business rates and also that it will still be part of school funding formulae and will have to be accounted for as part of schools’ accounts.

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.

Sound financial management is crucial to the financial resilience of councils and Cipfa’s proposed new code is a welcome addition to the tools and guidance that councils can use to achieve that.

The Treasury Management Code of Practice (“Treasury Management Code”) was introduced in 2001/02. Local authorities are required to “have regard” to the code in setting up and approving their Treasury Management arrangements.

This response has been agreed by Lead Members of the LGA Resources Board.