Local Government: Funding

Lord Wallace of Saltaire Excerpts

Monday 27th January 2025 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

I thank my noble friend. For 12 of the last 14 years, I was a local government leader, so his words definitely strike home to me. The Government are committed to local authority funding reform, with the updated approach that I spoke about from 2026 to 2027. We need to fix the foundations that he spoke about, so this will be developed in partnership with the sector and based on the principle of giving councils early certainty of their funding and a much fairer funding picture across the country. We are inviting views on our principles and objectives for funding reform through a consultation. We want to do this in consultation with the sector, and that consultation closes on 12 February. We will move towards an updated system and possible transitional arrangements to determine how local authorities reach their new funding allocations.

[Lord Wallace of Saltaire (LD)]

My Lords, we on these Benches share the view of the importance of remembering the Holocaust on this anniversary.

The Minister will be aware that centralisation of taxation in this country is far greater than in any other advanced democracy, and if finance is centralised, decisions will continue to be centralised. Is it not time for the Government to consider fundamental tax reform, in particular of the way local councils are funded? Will the Minister also consult her colleagues on whether we need a cross-party approach to tax reform for local authorities rather than having a tourist tax here and parking charges there, and otherwise depending on the Treasury to dole out funds?

[Baroness Taylor of Stevenage (Lab)]

The noble Lord makes a very important point about working on a consensus, which is why we have launched the major consultation on how we should take this forward. In addition, our English Devolution White Paper, which we published in December, sets out our plans to reset that balance between central and local government. That includes both funding and powers, and it is a new framework for English devolution that attempts to move power out of Westminster and back to those who know their areas best. That is the whole purpose of the devolution agreement. We want to see that done on the basis of it coming from the local areas upwards. We are committed to fixing those foundations, and we will do that with the people in our local areas and not to them.