Local Authorities: Financial Difficulties

Lord Dubs Excerpts

Wednesday 14th February 2024 Lords Chamber

Asked by

[Lord Dubs]

To ask His Majesty’s Government what assessment they have made of the financial difficulties facing many local authorities.

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

My Lords, we have listened carefully to local authorities about the pressures they are facing. That is why, in January, we announced additional measures worth over £600 million. Taking into account the recently announced local government finance settlement, that makes available up to £64.7 billion, an increase of 7.5% in cash terms on last year. The department continually monitors the sector, and we stand ready to talk to any council with concerns about its finances.

[Lord Dubs (Lab)]

My Lords, what the Minister said is of course welcome, but it is still a drop in the ocean compared to the cutbacks local authorities have faced since 2010. The Government keep talking about cutting taxes in a forthcoming Budget, but is not the real issue that council tax payers also pay taxes? Surely, council tax increases will have to make up for cuts in income tax. This is not honest.

[Baroness Scott of Bybrook (Con)]

My Lords, for many years we have had a cap on council tax increases. It remains at 2.99% for the general fund, with 2% extra for councils that want more money for social care funding. However, the department is establishing an expert panel to advise local government and the department on local government financial sustainability into the future. The panel will include the LGA and the Office for Local Government, and we look forward to its findings.