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Local Government Finance

Part of the debate – in the House of Commons at 1:13 pm on 5th February 2020.

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Photo of Jake Berry Jake Berry Minister of State (Cabinet Office), Minister of State (Cabinet Office) (jointly with the Ministry of Housing, Communities and Local Government) 1:13 pm, 5th February 2020

If we double the council tax that is paid by local people, then I will start to take lectures from the hon. Gentleman about what we should do. He should remember his own record. He entered Parliament in 2005 and was here when all this was happening; perhaps he would like to recall that.

Taken as a whole, this protection will mean that we see the lowest average council tax rise since 2016, ensuring that taxpayers continue to receive the breadth and quality of services that they enjoy today without, as they had under former Labour Administrations, the imposition of crippling tax hikes and rocketing monthly bills.

As we look towards future settlements, the Government intend to conduct a full multi-year spending review. We are already putting more money in this year, but the spending review will give us the opportunity once again to look at pressures in the round and provide councils with the certainty they need. We have committed to a fundamental review of business rates. As part of that work, we will need to consider carefully the link between the review and retention by local councils. We will of course continue to discuss that and the future direction with our partners in local authorities.

Everyone in this House wants to refresh the way we allocate funding, so that it reflects the most up-to-date needs and resources of local areas. That is key work to achieve the agenda set out by the Prime Minister, because dealing with local government finance is part of levelling up our entire country. We have made good progress with the review of relative needs and resources—or the fair funding review, as it is known—and I want to take this opportunity to thank Members on both sides of the House, some of whom have made constructive contributions to the process. The direction of the review has been welcomed by many, including many in local government, but now we have to deliver a sustainable approach, and we look forward to continuing to work with the whole sector.

The review is a large and complex project. Expectations are high on all sides, which is why we are committed to sharing emerging results with local government as soon as possible. We plan to share significant elements for technical discussions in the coming weeks and months. That will include formulas in the review that represent a majority of local government spending. However, I should remind Members that needs formulas represent only a small aspect of the review. As the LGA pointed out, it is simply not possible to predict the overall outcome for individual local authorities or groups of authorities and therefore the extent to which funding may move between authorities. Of course, we will need to consider the review in the context of the outcome of the planned spending review. We look forward to working with colleagues and sharing those results with the sector and the House shortly. I also look forward to updating the House once we have finalised proposals for our new and exciting settlement for local government. Finally—