Responding to the provisional Local Government Finance Settlement
published today, , Chairman of the Local
Government Association, said:
“Greater flexibility for local authorities in setting
council tax levels will give some councils the option of raising
extra money to offset some of the financial pressures they face
next year. With no other national tax subject to referenda, the
council tax referendum limit needs to be abolished so councils
and their communities can decide how under-pressure local
services are paid for, with residents able to democratically hold
their council to account through the ballot box.
“Years of unprecedented central government funding cuts
have left many councils beyond the point where council tax income
can be expected to plug the growing funding gaps they face. Local
government faces an overall funding gap of £5.8 billion by 2020.
Children’s services, adult social care and homelessness services
are at a tipping point as a result of funding gaps and rising
demand and increasingly little is left to fund other services,
like cleaning streets, running leisure centres and libraries, and
fixing potholes. While some councils will receive extra funding
next year, the Government needs to provide new funding for all
councils over the next few years so they can protect vital local
services from further cutbacks.
“It is good that the Government has accepted our call for
to avoid further New Homes Bonus changes and clarified plans to
introduce a fairer funding system and to allow local government
to keep more of its business rates income. We look forward to
continuing our work with the Government on further business rates
retention and the Fair Funding Review and remain clear that the
extra business rates income should go towards meeting the funding
gap facing local government and no council should see its funding
reduce as a result of a new distribution system.
“Delays to when these reforms will be implemented mean
councils are facing a financial cliff-edge that the Government has
to address. Councils will see their core funding from central
government further cut in half over the next two years and almost
phased out completely by the end of the decade. Councils who will
not receive a penny of this funding in 2019/20 will be pleased that
the Government has recognised the need to find a way to help them.
It must now also use the final Settlement to slow the pace of
funding cuts and provide replacement funding to all councils over
the next two years.
“This is essential to avoid councils reaching a financial
breaking point which will threaten the existence of some local
services. There is a real risk that the opportunities arising
from a new way of funding the local services our communities rely
on could be wasted if those very services are damaged beyond
repair by the time they are introduced.
“Only with fairer funding, new powers and fiscal freedoms
over the next few years and beyond can councils ensure children
and adults receive the care they deserve, desperately-needed
homes are built and roads are maintained to high standards and
other services are protected, such as maintaining our parks and
green spaces and running children’s centres and
libraries.”
NOTES TO EDITORS
Today’s Local Government Finance Settlement announced
that:
* All councils will be able to
raise council tax by up to 2.99 per cent in 2017/18 to fund local
services without the need for a referendum. The LGA said this
1 per cent increase above the referendum limit in 2017/18 would
raise £250 million.
* In 2018/19, 88 districts with the lowest
council tax will not benefit from this additional flexibility
because they can already increase council tax by up to £5 which
to them amounts to more than a 3 per cent increase.
* England's 152 social care authorities
will be able to increase council tax by up to a further 3 per
cent in total in 2017/18. Income from this extra precept must be
spent on social care. The maximum that social care authorities
can increase overall council tax in 2018/19 is 5.99 per cent
without a referendum.
