Local Government Finance

Debate between Antonia Bance and Florence Eshalomi

Wednesday 11th February 2026 Commons Chamber

[Florence Eshalomi]

I think it is fair to say that successive Governments have put the issue of council tax in the “too difficult” box. I hope that it will fall on this Government to finally address that and bring an end to this regressive form of taxation.

[Antonia Bance (Tipton and Wednesbury) (Lab)]

Does my hon. Friend agree that the work being done on the draft local government settlement to get us to this final local government settlement has actively put the principles of fairer funding into place? My local authority in Sandwell—the fifth most deprived local authority in the country—is getting an extra £28 million as a result of the continuation and increase of the recovery grant. That money will go on crucial services that we were deprived of in my area during 14 years of Conservative austerity. I know my hon. Friend will want to join me in welcoming the work being done by the Local Government Minister and our friends in the Treasury to make sure that the principles of fairer funding are put into place.

[Florence Eshalomi]

My hon. Friend is a doughty champion for her constituency and for her council’s needs. I think it is fair to say that the outdated and opaque previous funding settlement caused a number of issues for councils up and down the country. It is good to finally see this Government responding to that and ensuring that we have a fairer and more simplified settlement, so that our councils can get on with the day job of providing vital services for residents.

We have to be honest and ask: if councils have to impose a council tax hike just to fulfil mandatory services—going back to the question raised by the hon. Member for Wyre Forest (Mark Garnier)—where is that democratic choice for residents? If council tax is collected locally, how can it be right that what it is largely spent on is dictated by central Government? We know from the settlement today that the Secretary of State and the Minister have shown a boldness by ensuring that they continue to engage with local leaders, the Local Government Association, and cross-party colleagues and councils, to get to grips with the day-to-day issues facing local government, but I urge the Minister to continue on that road of being bold. The Government need to continue working, especially with Treasury colleagues, to properly address the growing demand on the mandatory costs that councils face, from SEND to adult social care and temporary accommodation. That demand for those core services will continue to grow no matter how much money the Government put into them.

There is a real need for a fundamental review of council tax and wider council funding. I urge the Government to go further and bring about a cross-party consensus, and to truly reform council tax and bring an end to this regressive form of taxation once and for all.