LGA responds to PAC report on local government finance

"Many councils were in a difficult financial position before the pandemic after a decade of central government funding reductions. The Committee is right to recognise that the Government has provided a significant financial package of support to cover cost pressures and some of the income losses incurred as a result of COVID-19. "


Thumbnail

Responding to the report by the Public Accounts Committee on local government finance, Cllr Sharon Taylor, Chair of the Local Government Association’s Resources Board, said: 

“Many councils were in a difficult financial position before the pandemic after a decade of central government funding reductions. The Committee is right to recognise that the Government has provided a significant financial package of support to cover cost pressures and some of the income losses incurred as a result of COVID-19. 

“This support will need to be kept under review and we continue to call on government to meet - in full - all cost pressures and income losses incurred by councils as a result of the pandemic.

“Councils continue to face significant demand pressures on day-to-day services and income losses, such as from local taxation, fees and charges. We agree with the Committee that the forthcoming Spending Review needs to provide councils with a multi-year settlement that puts local government funding on a long-term sustainable footing. This will enable them to more efficiently plan how to provide the local services our communities rely on and which have proved so vital during the pandemic.

“Investment in local services will be vital to our national economic and social recovery. With the right funding and freedoms, councils can help government achieve its ambitions to level up, drive improvements in public health, boost local economic growth, revive town and city centres, build more homes, fix our roads, improve the life chances of children and young people, and equip people with the skills they need to succeed so no one is left behind.”

Notes to editors

  1. 2021/22 is the third year in a row that councils have received a one-year funding settlement. 
  2. Council core spending power had the potential to increase by up to 4.5 per cent in 2021/22 to support vital local services. However, more than 85 per cent of this potential core funding increase this year was dependent on councils increasing council tax by up to 5 per cent.