Provisional Local Government Finance Settlement

Clive Betts Excerpts

Thursday 17th December 2020 Commons Chamber

[Robert Jenrick]

My hon. Friend makes an important point, and I share his desire to have a multi-year settlement for local government. Obviously, this year has proved a unique one, in which the kaleidoscope has been shaken in many respects and will take time to settle. I hope that when we come to do the settlement next year it will indeed be a multi-year one. I believe that that is the expectation of my right hon. Friend the Chancellor, but he will no doubt give confirmation in due course, as we see how 2021 turns out.

On local councils in tier 3, we are providing further funding for both councils themselves and their local business community, on a month-by-month basis, if they are in tier 2 or tier 3. The purpose of today’s settlement, in looking ahead to the likely covid expenditure that councils will face next year, is to ensure that both in respect of the month-by-month costs that councils are incurring, which have been about £500 million a month, and the losses they are incurring in sales, fees and charges, they at least have forward guidance to the middle point of the next calendar year. Of course we all hope that by Easter, and certainly by the summer, the position in the country and within councils will be dramatically different.

[Mr Clive Betts (Sheffield South East) (Lab)]

On behalf of the Select Committee, may I join both Front Benchers in thanking councils up and down the country for the brilliant job they have done in keeping services going and communities safe in the past few terrible months? The Government are forecasting a 4.5% increase in spending power for local authorities, and the assumption there is that councils will put up council tax by 5%, including the 3% for social care, all in one year. Although councils have the discretion to decide on that, will he confirm that the spending power in his statement assumes that all councils will put their council tax up by 5%? There is a forecast in here about ongoing covid costs. Does he accept that those costs might be greater? If they are, on an unforeseen basis, will the Government stand ready to provide extra money for councils if they can show that their costs are in excess of what the Government are so far calculating?

[Robert Jenrick]

I thank the Chair of the Select Committee for all his work and that of his Committee over the year. He is right to say that the figures we quote of an up to 4.5% real-terms cash increase in core spending power are dependent on the choices that local councils make in the weeks and months ahead, but one would expect that; local councils and the local democratic process will have to balance up the competing interests of providing public services and ensuring that hard-working people are not facing excessive increases in local council tax, and those will be different judgments in different parts of the country.

I will of course keep the covid costs being incurred by local councils under review. We have made good on our promises time and again since the start of the pandemic. Early in the pandemic, the Local Government Association came before the hon. Gentleman’s Committee and estimated that costs incurred by local councils would be around £10 billion. We are going to end this financial year having provided local councils with, I suspect, about £10 billion, and we are providing further billions of pounds into next year. So we can see the Government’s commitment and determination to support local councils.