Local Authority Finances

Lord Bishop of St Albans Excerpts

Tuesday 6th February 2024 Lords Chamber

Asked by

[The Lord Bishop of St Albans]

To ask His Majesty’s Government what assessment they have made of the state of the finances of local authorities.

[The Lord Bishop of St Albans]

My Lords, I beg leave to ask the Question standing in my name and declare my interest, as set out in the register, as a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

We have listened carefully to local authorities about the pressure that they are facing. That is why we have announced that the final local government finance settlement for 2024-25 will now make available £64.7 billion, an increase of 7.5% in cash terms on last year and above inflation. The department continually monitors the local government sector through data and direct engagement with individual councils. This includes considering the impact of inflation and wider economic circumstances.

[The Lord Bishop of St Albans]

My Lords, I congratulate the Government on that 7.5% increase for the local financial settlement for the coming year. However, council leaders also say that what makes planning very difficult is that they do not get much warning of these final settlements and increasingly spend more and more of their budgets on the statutory obligations. They are spending a much-reduced amount on the preventive measures, despite the evidence of the social and financial benefits of prevention. Can His Majesty’s Government commit to producing a medium-term financial strategy to help local authorities to plan the effectiveness and impact of their spending much more effectively?

[Baroness Penn (Con)]

My Lords, in recent years we have tried to give more clarity around elements of the settlement on a multi-year basis. We will continue to do this for the next spending review and beyond.