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.
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.
In our view, the proposals in the two consultations earlier this year were a valid attempt by CIPFA to alleviate some of the worst of the short-term problems, problems that are both a major aspect of the current crisis and a symptom of the long-term problems. It is therefore disappointing that it has not yet been possible to finalise a satisfactory outcome in response to those proposals.
The Local Government Association (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. This response has been agreed by Lead Members of the LGA Resources Board.
The information below outlines the scale of the financial challenge facing all councils, including district councils, and the measures which must be taken to ensure local government is funded sustainably. It also sets out the pressures facing some of district councils’ most in-demand services.
Investing in councils will have a positive effect on wider economic growth and the public finances. Research suggests that putting money into infrastructure and services such as social housing, local roads, and green spaces is good for the overall economy.
Councils will face an overall funding gap of £3.1 billion in 2019/20, which we estimate will rise to £8 billion by 2024/25. The pressures are particularly acute in adult social care, children’s services, public health and homelessness support. Overspends in these services have forced councils to make in-year budget cuts to balance their books.
Years of unprecedented funding reductions have had a significant impact on the local services our communities rely on, and the knock-on effect on other parts of the public sector.
Local authorities will face an overall funding gap of £3.1 billion in 2019/20, which we estimate will rise to £8 billion by 2024/25. The pressures are particularly acute in adult social care, children’s services and homelessness support.