Fair Funding Review

Baroness Pinnock Excerpts

Monday 24th November 2025 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

It is very important, particularly now, that we support local government, after 14 years of successive funding cuts and the battering it came under from the last Government. Through our funding reforms local authorities will be empowered, as key partners, to meet the housing need and help deliver growth across the country. We will reward local authorities for housebuilding, as they will benefit from additional council tax rates for each new house built in their area over the course of the multi-year period. On business rates, we will keep long-standing incentives so that local authorities continue to be rewarded for growth. Through their fair funding review, the previous Government recognised the need for reform, but they did not deliver. We are making good on this commitment and introducing improvements for the first time since 2013.

[Baroness Pinnock (LD)]

My Lords, the Minister has just explained that council tax projections for new homes will not now be included in the financial assessment for council income. However, those councils with high deprivation and low economic growth are likely to have below average rates of housebuilding too. Can the Minister explain why the Government are willing to penalise those areas once again?

[Baroness Taylor of Stevenage (Lab)]

I do not agree with the presumption in the question from the noble Baroness, Lady Pinnock. For too long, an outdated council funding system, based on decades-old data, has entrenched the inequality of which she speaks—we all know that—with those least able to raise council tax and business rates given less favourable funding settlements. This has left some councils on a cliff edge and communities in deprived areas facing service cuts and rising bills, as well as being unable to deliver the economic growth and housing that we know those communities need. Some councils in less deprived areas have benefited disproportionately, building up their reserves. Our reforms will reverse this injustice and make sure that councils will be funded fairly, enabling them to deliver for their communities on services and on the growth that we all want to see.