NALC calls for direct fiscal powers and funding for parish and town councils

We have called for significant reforms to local government finance and devolution, arguing that parish and town councils must be given direct access to funding streams and a greater role in fiscal decision-making as powers are devolved to local areas.

In our submission to the House of Lords' Economic Affairs Committee inquiry into fiscal devolution, we set out three core recommendations: direct access for parish and town councils to central government and strategic authority funding streams; a proportionate share of local business rates; and a clear expectation that devolution should extend beyond mayoral and principal authority level to genuinely empower local councils.

We argued that parish and town councils are currently excluded from a wide range of public funding programmes, which disadvantages communities and limits their ability to deliver local priorities. Allowing councils to apply for relevant central government and strategic authority funding directly would reduce pressure on the council tax precept and support the delivery of essential community projects.

Our response also calls for a new approach to local fiscal autonomy, including statutory partial relief from rating liability for non-commercial community assets owned by local authorities, particularly in more deprived rural areas. We highlighted that the current per-elector cap under Section 137 of the Local Government Act 1972 is centrally set and argued that this should instead be determined locally to enable parish and town councils to respond more flexibly to community needs.

A further key recommendation is that parish and town councils should receive an appropriate share of National Non-Domestic Rates collected in their areas. We suggest this could be piloted using existing programmes such as Pride in Place and Community Power initiatives, and aligned with emerging reforms under the English Devolution and Community Empowerment agenda.

We also advocated for the extension of the General Power of Competence to all parish and town councils, arguing that it would enable councils to operate more effectively and deliver a broader range of services. We note that other tiers of local government already benefit from such powers and say extending them would help parish and town councils respond more effectively to community needs.

Our submission further highlights the wider role of parish and town councils in supporting housing delivery and community infrastructure. We point to contributions made through neighbourhood planning and the provision of green infrastructure, recreational spaces, community buildings, youth facilities and support for vibrant high streets as examples of how parish and town councils already help shape sustainable local growth.

Our evidence concludes that strengthening the financial and statutory powers of parish and town councils is essential if fiscal devolution is to deliver meaningful benefits for communities and ensure that decision-making is genuinely taken closer to the people it affects.