Provisional Local Government Finance Settlement

Lord Greaves Excerpts

Wednesday 6th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I am sure that my noble friend Lord Bethell is absolutely right and the matter is under review.

[Lord Greaves (LD) [V]]

My Lords, I declare my interest as a member of Pendle Council. Pendle is a small district in east Lancashire. I speak again from the sunlit uplands of east Lancashire but they are not sunlit from the point of view of local government finance. The Minister talks about a 4.5% increase in core spending power but in my authority, if we did not increase council tax by the 2% that is allowed, we would have a reduction in core spending power, which is grossly unfair. About two-thirds of our council tax payers are in band A, which puts that band up to unsustainable levels. It is getting out of hand. People simply cannot afford the council tax that they are now being asked to pay. What is the Minister doing about that? Will he give an absolute commitment that not only is there the £1.5 billion in the settlement for Covid-related extra costs but there is still a commitment from the Government that all extra costs to local authorities from Covid during the next financial year will be met by government grant?

[Lord Greenhalgh (Con)]

My Lords, I remind everyone that we have seen a seismic contraction of the economy and that many people have lost their jobs and will need to retrain. This has been a dreadful pandemic and it continues to be extremely tough as we enter another lockdown, but with the glimmer of hope that we have with the vaccine being available. We are providing grant funding that is absolutely flat in cash terms. Baseline funding remains £12.48 billion, the revenue support grant has increased a tad from £2.32 billion to 2.33 billion. Other grants have increased from £4.98 billion to £5.26 billion. That is quite a sizeable increase. There is no reduction at all in cash year on year, with inflation at relatively low levels and, as I mentioned, huge amounts of support for Covid-related pressures. I think that is an excellent financial settlement for local authorities. It really is up to the people in town halls to show some civic leadership and decide what they tax the local residents. If they choose to tax them heavily then they may have to pay the price at the ballot box, but that is democracy for you.