Spending Review 2020

Baroness Eaton Excerpts

Thursday 3rd December 2020 Grand Committee

[Baroness Eaton (Con) [V]]

My Lords, today I shall focus my remarks on the impact of the spending review on councils. Local government has been critical in the fight against Covid-19, protecting the most vulnerable, supporting our local businesses and keeping the country running. Given the commendable leadership from our local politicians and their officials, it is right that the spending review provides some financial certainty for councils next year. A potential increase of 4.5% in council spending power will help support vital local services, albeit that the increase assumes that council tax bills will rise by 5% next year—something that will place a financial burden on households at a time of economic uncertainty.

While the spending review did make progress in helping address the short-term pressures on councils, as it is a one-year settlement there is still much to do. The financial pressures facing local services have increased because of Covid, and the challenge facing councils is stark. It is time for change, which is why I support the LGA’s calls for multiyear financial settlements and place-based budgeting, which will give councils long-term certainty, sustainability and, as importantly, the power to innovate.

While every pot of money that national government announces is a tempting opportunity for a ministerial press release, we need to look again at how that approach fragments funding and creates unnecessary complications and duplications. The Levelling Up Fund would be a good place to start this conversation, along with a move back to the community budgets model that I helped pilot a decade ago. By giving councils financial sustainability, certainty and the power to do things differently, we can empower their efforts to level up inequalities and rebuild our national economy, one local economy at a time.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I call again the noble Lord, Lord Loomba.