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The hon. Lady suggests that the only way councils can access funds to provide social care is through council tax, which is absolutely not the case, as she knows. It is an important way to raise some of the funding, but an increasing amount is coming from central resources. For example, the £2 billion that was allocated in the spring Budget takes into account the ability of local authorities, including the hon. Lady’s, to raise money locally. It is right that we have that balanced approach, but I know that there is more to do on adult social care, and that funding alone will not help to fix the challenges. This long-term challenge requires a long-term systemic change. The publication of a Green Paper this summer on future challenges in adult social care will help set us on a path to secure that.
Finally, we are responding to calls for more flexibility over setting council tax. Local authorities will be able to increase their core council tax requirement by an additional 1% without a local referendum, bringing the core principle in line with inflation. This will enable them to raise revenue and meet growing demand for their services while keeping taxes low. Having done away with Whitehall capping, we have enshrined these checks and balances into the system. Under the Localism Act 2011, local government can increase council tax as it wishes, but excessive rises need to be approved by local residents in a referendum.
In addition, directly elected Mayors will decide the required level of precept by agreement with their combined authorities, and it will be easier for police and crime commissioners to meet local demand pressure under measures that I have agreed with the Home Secretary. They will allow for a £12 council tax flexibility for police services, raising an additional £130 million next year. We will, however, defer the setting of referendum principles for town and parish councils for three years, and we will keep that under review. In all, I want to see the sector doing everything possible to limit council tax increases and show restraint. I am keen to ensure that these freedoms are not abused, and I am sure voters are too.
My Department’s name recently changed to the Ministry of Housing, Communities and Local Government. That underlines our focus on fixing our broken housing market and getting Britain building, but I remain absolutely committed to the community and local government elements of our work. They are the foundations on which everything else stands. It is not enough to build more homes; we need to build better and stronger communities. Councils acting truly as local government and not local administration will help us to achieve that.