Asked by: Al Pinkerton (Liberal Democrat - Surrey Heath)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, how changes to the fair funding formula will affect the spending power of (a) Surrey County Council and (b) district and borough councils in Surrey.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
This multi-year Local Government Finance Settlement is our most significant move yet to make English local government more sustainable. The government is making good on long overdue promises to fundamentally update the way we fund local authorities. Our reforms will ensure that this funding is allocated fairly, and that the places and services which need it most are supported.
Since coming into power, this government will have made available a 23.6% cash-terms increase in Core Spending Power in 2028-29 compared to 2024-25, worth over £16 billion. By the end of the provisional multi-year Settlement (2028/29), Surrey’s Core Spending Power will have increased by £82m (7%) since 2024/25. We will support local authorities to manage their updated funding positions by phasing in changes over the multi-year Settlement and protecting councils’ income, including locally retained business rates growth.
Areas will need to agree how to divide available funding locally in a sustainable way during the local government reorganisation implementation period. This will provide areas with greater flexibility.
Asked by: Earl of Clancarty (Crossbench - Excepted Hereditary)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government what assessment they have made of the effect of the planned local government reorganisation on the continuance of the funding for arts, cultural and heritage projects and facilities which is currently provided by district and borough councils.
Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)
The funding of local cultural services and organisations is a matter for individual local authorities, but the Government strongly supports their doing so, not least because of the significant economic, social, and wellbeing benefits cultural organisations deliver. The Local Government Finance Settlement for 2024–25 makes available up to £64.7 billion for local authorities — an increase in Core Spending Power of up to £4.5 billion or 7.5% in cash terms on 2023–24. This above-inflation increase demonstrates the Government’s commitment to supporting local authorities. The majority of this funding is not ring-fenced, so local authorities can consider how best to balance their local priorities.
As set out in the Government’s guidance on proposals for unitary local government, areas should consider issues of local identity and cultural and historic importance in working up plans that are in the best interests of the whole area.
Asked by: Daisy Cooper (Liberal Democrat - St Albans)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, pursuant to the Answer of 21 January 2025 to Question 23431 on Local Government: Employers' Contributions, whether she made a comparative assessment of the potential impact of this approach to calculating National Insurance Contribution funding on compensation for increased payroll costs for (a) district councils and (b) county councils and unitary authorities.
Answered by Jim McMahon
The government has announced an additional £515 million of support for local government in England specifically to manage the impact of changes to employer NICs announced at the Autumn Budget.
Final allocations to local authorities will be published alongside final positions on methodology as part of the final Local Government Finance Settlement in early February 2025.
Asked by: John Hayes (Conservative - South Holland and The Deepings)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what estimate she has made of the funding gap for district councils in Lincolnshire in the next two years.
Answered by Jim McMahon
The provisional Settlement for 2025-26 makes available £69 billion for local government, which is a 3.5% real terms increase in councils’ Core Spending Power on 2024-25. The final Settlement will increase further, to incorporate the £515 million of funding announced for National Insurance Contributions.
The Department works closely with local government and other government departments to understand specific demand and cost pressures facing local government on an ongoing basis. This involves looking at a range of cost and demand data, as well as regular engagement with local authorities.
Future funding for local government and the timings of the Local Government Finance Settlement are bound by the spending review cycle. The government has committed to a multi-year Spending Review in Spring 2025. We are committed to delivering the first multi-year Settlement in 10 years in 2026-27, which will distribute funding based on an updated assessment of need. We are fully consulting with the sector on our funding reform proposals.
Asked by: John Hayes (Conservative - South Holland and The Deepings)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, whether (a) South Holland and the Deepings constituency and (b) Lincolnshire will receive funding from the Recovery Grant, announced on 28 November 2024.
Answered by Jim McMahon
The newly announced £600 million Recovery Grant, part of the provisional 2025-26 Local Government Finance Settlement, is part of the careful balance this Government is making between meeting the current, acute pressures and taking meaningful steps towards a fundamental update of the system that will improve sector sustainability as a whole. The Recovery Grant will go to places where, weighted by population, deprivation outweighs council tax raising ability.
The government is also clear that the outcomes of this grant will not reflect the final outcome of reform which will be based on a full, broader assessment of need and will not be based on deprivation alone.
Both Lincolnshire County Council and South Kestevan District Council will not receive funding from the Recovery Grant. South Holland District Council will receive £0.2 million. Although not all councils will receive allocations from the Recovery Grant, it is only one part of the 2025-26 Settlement, which will be worth £69 billion and will ensure that no council will see a decrease in Core Spending Power.
Asked by: Roz Savage (Liberal Democrat - South Cotswolds)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what assessment she has made of the potential impact of changes in the level public sector pay on district council budgets over the last three years.
Answered by Jim McMahon
Local authorities are independent employers responsible for the management and organisation of their own workforces, including remuneration. The Government recognises the challenges local authorities are facing as demand increases for critical services. Future local authority funding decisions will be a matter for the Budget and Local Government Finance Settlement in which we are engaged.
Asked by: Beccy Cooper (Labour - Worthing West)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what assessment she has made of the impact of trends in public sector pay over the last three years on district council budgets.
Answered by Jim McMahon
Local authorities are independent employers responsible for the management and organisation of their own workforces, including remuneration. The Government recognises the challenges local authorities are facing as demand increases for critical services. Future local authority funding decisions will be a matter for the Budget and Local Government Finance Settlement in which we are engaged.
Asked by: Polly Billington (Labour - East Thanet)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, whether her Department has made an estimate of how much funding to Thanet District Council has been cut since 2010 in (a) real terms and (b) as a percentage; and whether she has made an estimate of the potential current level of funding without the cuts.
Answered by Jim McMahon
We understand that improving how local government is funded is crucial to enabling councils to deliver for local residents and ensuring we can deliver our missions, and we acknowledge the real pressures faced by councils in dealing with demand for vital services. We will provide councils with more stability and certainty through moving towards multi-year funding settlements and by ending wasteful competitive bidding. This will ensure councils can plan their finances for the future properly, delivering better value for money for taxpayers.
For 2024/25, the Local Government Finance Settlement was £64.7 billion. For Thanet Council, this made available up to £20.3 million, an increase of £1.1 million, or 5.9% on 2023-24.
Future local authority funding decisions will be a matter for the next Spending Review and Local Government Finance Settlement. We want to hear from councils about the financial challenges they are facing and we are committed to improving the local government finance landscape in this Parliament.
Asked by: Lord Storey (Liberal Democrat - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask Her Majesty's Government what are the consequences when auditors fail to sign off a district council's annual budget.
Answered by Lord Greenhalgh
A council's annual budget is signed off by a meeting of the full council as presented by its chief finance or Section 151 Officer. An auditor does not generally have a role to play in this process. However, the auditor issues an opinion on ie ‘signs off’ a council’s year-end financial statements. This opinion may be unmodified or, where an auditor has identified significant issues, they may give a modified opinion. Auditors also have powers to issue an advisory notice or a public interest report. Local authorities are accountable to their electorate.
It is a legal requirement for a council’s accounts to be signed off by the external auditor, however as the auditor must be satisfied with the accounts before doing so, there is not a specific timescale within which they must give their opinion or other specific consequences of a failure to sign off the accounts. Recently there has been a significant increase in the number of council accounts that remain outstanding. As at 31 May 2020, the 2018/19 accounts of 57 councils had not been signed off.
To help address the audit delay issue, we commissioned the independent Redmond review to review arrangements supporting the transparency and quality of local authority financial reporting and external audit within the Local Audit and Accountability Act 2014. The Review is due to report later this year. We also recognise the pressures councils - and auditors - are under in the context of Covid-19 and have therefore extended the deadlines for them to publish their draft and final accounts in 2019/20 to 1 September and 30 November 2020 respectively.
Asked by: Gregory Campbell (Democratic Unionist Party - East Londonderry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he make an assessment of the potential merits of extending the remit of the Public Works Loan Board to include local councils in Northern Ireland.
Answered by John Glen
The Public Works Loan Board provides loans at lower than market rates for capital expenditure to local authorities in England, Scotland and Wales. The Local Government Finance Act (Northern Ireland) 2011 provides the legal basis which permits district councils to borrow and sets out the responsibilities of the council should they choose to do so. The Financial Provisions (Northern Ireland) Order 1983 is the legislation which underpins government lending from the Northern Ireland Consolidated Fund to local councils to support capital expenditure. This provides loans at lower than market rates for capital expenditure without extending the remit of the Public Works Loan Board to include local councils in Northern Ireland.