Thank you for contacting me about local government spending power.
Let me start by saying that I fully recognise the important and tireless efforts undertaken by local councils. They have a vital role in delivering essential public services and building stronger communities right across the country.
The final Local Government Finance Settlement for 2023-24 makes available up to £59.7 billion for local government in England, an increase in Core Spending Power of up to £5.1 billion or 9.4 per cent in cash terms on 2022-23. This is an increase in Core Spending Power of £3.1 billion of taxpayer subsidy to councils in England, before local decisions about council tax changes are made. The settlement for councils for this financial year ensures the most relatively deprived areas of England receive 17 per cent more per dwelling in available resource through this year’s settlement than the least deprived areas.
The Government is giving local authorities in England additional flexibility in setting council tax by increasing the referendum limit for increases in council tax to three per cent per year as of April 2023. Local authorities with social care responsibilities can also increase the adult social care precept by up to two per cent per year. I was encouraged to see the Government put in place a new one-off funding guarantee to ensure all local authorities would see a minimum three per cent increase in their Core Spending Power in 2023-24 before taking any local decisions on council tax levels.
Beyond the annual Local Government Finance Settlement, local authorities receive a wide range of funding from government departments to reflect their broad responsibilities. To help increase the effectiveness and efficiency of the current funding system, the Government has published plans to simplify the funding landscape for local authorities. This includes by simplifying existing funds and putting in place a new Funding Simplification Doctrine next year which will help assess suitable distribution methodologies for new funding streams.
I completely understand concerns about the impact of inflation on the provision of local services and the local government sector. I therefore stand firmly behind the Prime Minister in his commitment to halve inflation this year to ease the cost of living and give people financial security. Having spoken to colleagues, I am aware that the ways in which inflation interacts with local government finances are complex. Not all areas of local government expenditure will be sensitive to inflation, for instance, and some local authorities have multi-year contracts in place. I have been assured that the Government is working with the local government sector to understand the impacts of inflationary increases.
Concerns that problems in Thurrock and Birmingham may happen elsewhere
You are right to stress the importance of accountability and transparency across local government, and I agree that residents everywhere deserve a well-run council that can sustainably and responsibly fund the delivery of good-quality services. The Government has recently established the Office for Local Government which will provide data and analysis about the performance of local government, and support its improvement. As the Secretary of State has said, as well as helping councillors and members of the public to better scrutinise local decisions, access to data about the relative performance of councils will allow central government and its partners to identify where there might be challenges and a need to step in to give support, where appropriate.
EDM 835 was tabled in a previous Parliamentary session and is now unavailable for signature.
Thank you again for taking the time to contact me.
Craig Whittaker MP