Provisional Local Government Finance Settlement

Lord Fuller Excerpts

Thursday 19th December 2024 Lords Chamber

[Lord Fuller (Con)]

My Lords, I have sat on the Local Government Association’s resources panel for at least the last dozen years—it might be more—so I am fairly well acquainted with some of these things. Local government already had a mountain to climb, but, if I may dwell for a moment on the national insurance increase, I regret to say that that has made it even worse. I am grateful to the Minister for identifying that the £515 million grant for NIC is not to be ring-fenced, but not making it ring-fenced does not make it go any further. The LGA has already calculated that the costs of the NIC will be £637 million and of contractors will be £1.13 billion. The shortfall is £1.3 billion. How does she account for that shortage, and what should be cut? The noble Baroness mentioned the new homes bonus. Does she agree that that will not say much about the incentives to build homes? Finally, the noble Baroness mentioned funding reform. Will she commit to the no-detriment principle in the previously envisaged transition methods, whereby no council will be worse off during the transition than it is today?

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord. One of the reasons why we have set up the English devolution programme is to get a more effective and efficient way of managing local government. We will not solve overnight the funding problems that have accumulated over 14 years. It will take a while to do that, but in this settlement we have ensured an increase for most local authorities and no local authority will get less funding than before. We will invite views on reforming the new homes bonus as part of the local authority funding reform consultation that will be published alongside the settlement. Although the Government proposed that next year will be the final year of the NHB, we will look at it so that councils can do their financial planning around it and we will consider it as part of the spending review. I cannot commit to no detriment at this stage because we have not even started the consultation on the spending review yet, but no authority received a worse settlement in this year’s settlement than it had before.