Visiting in Care Homes, Hospitals and Hospices: Government Response to Consultation

Tuesday 5th December 2023 Written Statements

[The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)]

Today, the Government have published details on the local government finance settlement for the next year, for councils across England. This policy statement comes in advance of the provisional local government finance settlement, and shows the steps this Government are taking to ensure stability of funding for councils.

At this year’s settlement, we are on course to provide an above-inflation increase in funding to the sector. We estimate that the settlement will make available approximately £64 billion to the sector, and expect that councils will see, on average, an above inflation increase in their core spending power next year. In cash terms, this is an increase of around £4 billion for the sector, or over 6%. At this time, we also recognise the need to provide stability to the whole sector, and we are therefore providing a sector-wide funding guarantee. This will be on the same terms as last year, ensuring that all local authorities see a minimum 3% increase in their core spending power before taking any local decisions on council tax levels.

The Government manifesto commits to continuing to protect local taxpayers from excessive council tax increases. This is an important local democratic check and balance to avoid the repeat seen under the last Labour Government when council tax more than doubled. The proposed package of referendum principles strikes a fair balance. Local authorities should of course be mindful of cost-of-living pressures when taking any decisions relating to council tax. As previously set out, we will set the core council tax referendum threshold at 3%, and set the adult social care referendum threshold at 2% for all authorities responsible for adult social care services. The council tax referendum provisions are not a cap, nor do they force councils to set taxes at the threshold level. It is for individual local authorities to determine whether to use the flexibilities detailed above, taking into consideration the pressures many households are facing. These actions are to protect hard-working people from excessive tax rises and are in contrast to the Labour Government in Wales which is planning to hike council tax through a council tax revaluation and higher council tax bands.

The Mayor of London has requested flexibility to levy an additional £20 on Band D bills to the Greater London Authority (GLA) precept to provide extra funding for Transport for London (TfL). The Government has expressed ongoing concern about the management of TfL by this Mayor, and it is disappointing that London taxpayers are having to foot the bill for the GLA’s poor governance and decision-making. Whilst the Government will not oppose this request, any decision to increase the precept is solely one for the Mayor, who should take into account the pressures that Londoners are currently facing on living costs and his decision to raise his share of council tax by 9.7% last year.

In the final year of the current spending review period, now is the time for stability and continuity, and we will therefore not be pursuing any fundamental reforms to the system. The Government is pleased to reconfirm the additional funding that we committed to the sector at last year’s autumn statement. In total we are providing local government with approximately £1 billion in additional grant funding for social care compared to 2023-24. We are also continuing the approach set out at last year’s settlement for other grants such as the rural services delivery grant and new homes bonus, which we know are important to councils.

Despite recent decreases in the rate of inflation, pressures still exist for local authorities. The Government ask authorities to continue to consider how they can use their reserves to maintain services over this and the next financial year, recognising that not all reserves can be reallocated, and that the ability to meet spending pressures from reserves will vary between authorities.

The exceptional financial support framework is available to provide support where a council has a specific and evidenced concern about its ability to set or maintain a balanced budget, including where there has been local financial failure. Where councils need additional support from Government, they should take every possible step to minimise the need for that support to be funded by national taxpayers, while also recognising the cost-of-living pressures on families. As part of that process, the Government will consider representations from councils, including on council tax provision.

We have made it clear that any attempt from a local authority to implement a “four-day week” is contrary to the interests of local taxpayers, and that this working practice does not represent good value for taxpayers’ money, nor places the sector in a good light with the public. We are continuing to work on measures to discourage the use of this practice. Those councils which are considering or operating a four-day working week pattern should stop this practice immediately.

All of the proposals set out in the policy statement will be subject to the usual consultation process within the local government finance settlement. This written ministerial statement covers England only. The policy statement will be deposited in the Libraries of both Houses, and has been published on gov.uk:

https://www.gov.uk/government/publications/local-government-finance-policy-statement-2024-to-2025

[HCWS95]