LGA briefing - local government finance and arrangements beyond 2020

Key Messages

• Councils are at the heart of their local areas, improving residents’ lives on a daily basis. For local government to maximise its potential and to protect local services from further cuts, it must be made financially sustainable and truly independent.
  
   
• We are calling for the Government to address the overall funding gap of £5.8 billion facing local government by the end of the decade, and to provide an additional £1.3 billion required to stabilise the adult social care provider market.
  
   
• Full retention of the £26 billion of business rates collected locally each year by councils could be an important step towards greater fiscal independence away from uncertainty and reliance on favourable decisions by the Government to fund local services. This can only be achieved if the extra revenue is used to ensure that existing council services are properly funded. Councils should be free to use income from this tax to protect and improve local services.
  
   
• Local authorities’ funding allocations beyond 2020 are not clear, due to the pause in reforms to business rate retention and the fair funding review. Many local authorities will be in a position of not only not receiving Revenue Support Grant, but having to pay back funding to the Government. This is not sustainable and does not allow councils to plan how they will deliver services. The Government should offer a multi-year settlement to cover funding up to the point when local government finance reform is introduced.
  
   
• Further information on how local government stands ready to meet the challenges of a changing world are outlined in our recent Growing Places report. This champions how councils can – with fairer funding and freedom from central government – build desperately-needed affordable homes, create jobs and school places, provide the dignified care for our elderly and disabled, and boost economic growth.

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