Local Government: Energy and Inflation

Department for Levelling Up, Housing and Communities written question – answered on 6th July 2022.

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Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

To ask the Secretary of State for Levelling Up, Housing and Communities, if he will make an assessment of the implications for his policies of the Local Government Association's analysis of the impact of inflation and energy prices on councils, published on 28 June 2022.

Photo of Mike Amesbury Mike Amesbury Labour, Weaver Vale

To ask the Secretary of State for Levelling Up, Housing and Communities, with reference to Local Government Association analysis of 28 June 2022 which found that rising energy prices, rising inflation, and National Living Wage pressures are set to add £3.6 billion in unforeseen extra cost pressures onto council budgets in 2024-25, what assessment his Department has made of the effects of that matter on (a) council budgets and (b) the ability of local authorities to maintain public services that are helping communities recover from the pandemic and residents cope through cost of living rises; and what steps his Department is taking to (i) tackle cost pressure on councils and (ii) maintain public services.

Photo of Kemi Badenoch Kemi Badenoch Minister for Equalities, Minister of State (Housing, Communities and Local Government), Minister of State (Foreign, Commonwealth and Development Office), Minister of State (Foreign, Commonwealth and Development Office) (jointly with Department for Levelling Up, Housing and Communities)

The Local Government Finance Settlement makes available £54.1 billion in 2022/23 for local government in England, an increase of up to £3.7 billion on 2021/22.

Inflation forecasts are higher than they were when the settlement was announced. How that interacts with the finances of local government is not straightforward, as not all areas of expenditure will be sensitive to inflation and local authorities may have multi-year contracts, cushioning them from this year’s inflationary increases.

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