Local Government Finance Settlement

Housing, communities and local government – in the House of Commons on 19th July 2021.

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Photo of Chris Matheson Chris Matheson Shadow Minister (Digital, Culture, Media and Sport)

What plans he has to review the local government finance settlement.

Photo of Luke Hall Luke Hall Minister of State (Housing, Communities and Local Government)

The local government finance settlement this year was another excellent outcome for councils. We made available an increase in core spending power from £49 billion last year to £51.3 billion this year—an increase in cash terms of 4.6%. There are no plans to review this positive outcome for councils, which was unopposed by this House.

Photo of Chris Matheson Chris Matheson Shadow Minister (Digital, Culture, Media and Sport)

The prevailing problem for local councils is, of course, the massive cuts from central Government funding, but may I ask the Minister to reflect on another issue—the patchwork of funding and the short-term basis of that funding? Would it be possible to have a settlement, of perhaps three years, that gave councils more time to plan with the less money that they have?

Photo of Luke Hall Luke Hall Minister of State (Housing, Communities and Local Government)

First, I would not accept that there are cuts for local government spending in the finance settlement; there was a huge increase this year. If the hon. Gentleman felt it was an unacceptable settlement, he had the chance to oppose it. His local council saw a 4.1% increase in funding this year and it has £150 million sat in reserves, so I do not accept that argument at all. On biddable pots of funding, that is exactly why we have provided capacity funding to councils in the top priority status for the levelling-up fund and community renewal fund, to help them with that work to build good business cases and bids, and submit them to central Government—and to build strong relationships with us as well. I do not accept his overall point about funding, but we are absolutely supporting councils with the capacity funding that they need, and helping them to build that through the support we provide through the Local Government Association as well.