NALC responds to the government’s local government finance plans

This month (September 2017), the department of Communities and Local Government (DCLG) has published its plans for local government finance. The plans come from a technical consultation paper on the 2018/19 Local Government Finance Settlement.

This consultation paper describes the Government’s proposals intended approach for the third year of the multi-year settlement.

The remaining sections of this document set out our proposed approach to the 2018-19 settlement, which includes:

• outlines of the third year of the multi-year settlement offer for those councils that accepted the offer, and arrangements for those that did not

• outlines of the method for distributing New Homes Bonus funding following implementation of reforms announced at the time of the 2017-18 provisional settlement and a proposal for further incentives to support the delivery of housing growth

• outlines of the Government’s proposals for the council tax referendum principles for 2018-19

• confirmation of the approach being taken for adjusting business rates tariff and top-ups to cancel out, as far as is practicable, the impact of the 2017 business rates revaluation on local authorities’ income 8

• outlines of the approach to Mayoral Combined Authorities precepts in 2018-19

• outlines of the approach for allocating settlement funding where a fire authority transfers from a county council in accordance with the provisions of the Fire and Rescue Services Act 2004, as amended by the Policing and Crime Act 2017 and the implications for the Adult Social Care council tax precept.

Responding to the publication of DCLG’s technical consultation on the local government finance settlement, Cllr Sue Baxter, NALC chairman, said; “I had a very positive and constructive meeting with local government minister Marcus Jones MP to discuss local parish and town council precepts in advance of the 2018-19 Local Government Finance Settlement Technical Consultation Paper. England’s 10,000 local councils are continuing to grow and deliver more services, are increasing transparency and engagement with local people, and improving how they operate – all points which I am pleased the minister recognises.
 
“Fiscal responsibility in particular remains high on the agenda for local councils, with just under half of councils demonstrating restraint by increasing the precept – their small share of council tax – by more than 2 per cent this year. According to our recent research, for a third of councils this was due to increased costs such as employer National Insurance and loss of council tax support grants, and for 34 per cent this was due to taking on a new service or having assets transferred from principal councils. Our analysis also shows that two thirds of local councils are not solely reliant on the precept and use other sources of funding to invest in projects to improve their area.
 
“While total precepts account for just 1.6 per cent of total council tax – £479 million in 2017/18 – local councils actually contribute and invest around £2 billion each year to local areas and economies through councillor volunteer hours, grants and other income and their land and property assets.
 
“I look forward to continuing to work with the government on the important issue of parish funding, including exploring ways in which we can together help communities to help themselves through flexible and diverse funding, and we will be providing further evidence through this consultation of how councils are responding to the financial challenges faced by local communities and public services.”