Opposition Day debate: Local government funding

On Wednesday 28 March 2018, the House of Commons will debate the motion:

• That this House believes that local government has severely suffered as a result of almost eight years of brutal and devastating cuts; notes with concern that the Institute for Fiscal Studies estimates that between 2010 and 2020 local government will have had direct funding cut by 79 per cent; is concerned that the top ten most deprived councils in England are set to see cuts higher than the national average, with nine on course for cuts more than three times higher than the national average; believes there is a risk that services and councils are reaching a financial breaking point; calls on the Government to act on the warnings of the National Audit Office and initiate a review into the funding of local government to ensure that the sector has sustainable funding for the long term and to immediately provide more resources to prevent more authorities following Conservative-run Northamptonshire into effective bankruptcy; and further calls on the Government to report to the House by Oral Statement and written report before 19 April 2018 on what steps it is taking to comply with this resolution.

The following material includes links to: Commons Library briefings; recent statements on local government finance; updates to the Fair Funding Review; National Audit Office’s report; Max Caller’s Best Value report; and a spreadsheet providing details of grant funding since 2010/11 and the core spending power of local authorities – see supporting document. 

Commons Library briefings

• Council tax: local referendums, 20 December 2017. This briefing note explains the system of referendums on council tax increases in local authorities. It sets out the legislative framework and the thresholds that have been set in previous years.
• Reviewing and reforming business rates, 23 November 2017. This note covers the introduction of local government retention of all business rate revenue in England (‘100% business rate retention’); the existing system of 50% business rate retention by local government; and adjustments to business rate reliefs made between 2014 and 2016. It also notes some future business rate reliefs that would have been introduced by the Local Government Finance Bill 2016-17. It draws links between these changes and the two ‘business rate reviews’ conducted by the Government between 2013 and 2015.
• Business rates: the 2017 revaluation, 21 March 2017. This Commons Library briefing note explains the processes governing the 2017 business rates revaluation.

Ministerial Statements on local government finance

• Written statement by the Secretary of State for Housing Communities and Local Government (Sajid Javid) on the publication of the Max Caller report on Northamptonshire County Council Best Value Inspection. [15 Mar 2018, HC WS545]
• Written statement by the Secretary of State for Communities and Local Government (Sajid Javid) on the publication of the Report on Local Government Finance (England) 2018–19. [6 Feb 2018, HCWS545]
• Written statement by the Secretary of State for Communities and Local Government (Sajid Javid) on the financial management and governance at Northamptonshire County Council. [9 Jan 2018, HC WS394]
• Oral statement by the Secretary of State for Communities and Local Government (Sajid Javid) on the Local Government Finance Settlement. [HC Deb 19 Dec 2017 cc917-933] 

Ministry of Housing, Communities & Local Government

• Fair funding review: a review of relative need and resources (closed consultation). Ministry of Housing, Communities & Local Government, 19 Dec 2017
• Fair Funding Review – review update [Doc], Steering Group, 1 Feb 2018. Alongside the provisional 2018/19 local government finance settlement, the Government confirmed that it will aim to implement a fair funding review of relative needs and resources in April 2020. The results of the review will be used in forming the funding.
• The progress of the Fair Funding Review [pdf]. Fair Funding Review – overview and terms of reference.

National Audit Office

• NAO report, Financial sustainability of local authorities 2018, [HC 834] 8 Mar 2018. Reviews developments in the sector and examines whether the Department, along with other departments with responsibility for local services, understands the impact of funding reductions on the financial and service sustainability of local authorities.
• The House of Commons debated the NAO Report on 20 March 2018 on the motion: “That this House has considered the National Audit Office report on the financial sustainability of local authorities.”

Northamptonshire County Council

• Northamptonshire’s Section 114 notice – Letter to Members of Northamptonshire County Council from the Executive Director of Finance, 17 Feb 2018.
• Urgent Question on Public Service Delivery: Northamptonshire, 6 February 2018
• Mr Philip Hollobone (Kettering) (Con): To ask the Secretary of State for Housing, Communities and Local Government what are the implications for public service delivery in Northamptonshire of the issuance by Northamptonshire County Council of a section 114 notice.
• Max Caller’s report on Northamptonshire County Council Best Value Inspection, Jan – Mar 2018 

County Councils Network

CCN Responds to Northamptonshire Best Value Report, 15 March 2018

London Councils

London Councils – Local government finance

The Fair Funding team is responsible for developing London Councils’ policy on local government finance, performance and procurement.

Resolution Foundation

Resolution Foundation report on council tax, Home affairs: options for reforming property taxation, 20 Mar 2018. Presents policy options on residential property tax reform ahead of a final report later this year by the Intergenerational Commission.

Local government finance data

The table in the spreadsheet below provides details of grant funding since 2010/11 and the core spending power of the authority – please note that the relevant funding amounts cannot be directly compared over combined years before 2015/16. The appropriate comparison is the percentage change between adjusted and actual amounts between the stated two years.