Briefings and responses

Business rates account for around a quarter of all council spending power. Money raised is used to pay for vital local services, such as caring for older and disabled people, protecting children, fixing potholes and collecting bins.

The timing of these regulations presents a major issue both for councils and for employees.

On the high streets, footfall is down over 43 per cent compared to the same period last year. Before the pandemic, footfall had dropped over 10 per cent in the last 7 years. Internet sales had risen 21 per cent of all retail sales from 7 per cent a decade earlier and during the pandemic had jumped to nearly 33 per cent of all retail sales.

We welcome closer working between the VOA and local authorities. This must be accompanied by measures to significantly reduce the backlog of appeals. The VOA and councils must receive additional funding to implement these changes.

The LGA has significant concerns with the Local Authorities (Borrowing and Investment) Bill which seeks to restrict the acquisition of land and property by councils outside their own boundaries. The Bill also seeks to limit local authorities’ investment in “commercial risk-taking enterprises” and limit council borrowing for non-core activities.

Local government needs a system that raises sufficient resources for local priorities in a way that is fair for residents and gives local politicians all the tools they need to be the leaders of their communities. For councils, it is also important that the tax system, including business rates, provides as much certainty as possible.

Taking into account the grant support received so far, and assuming that the income guarantee scheme parameters will compensate councils for around £1 billion of lost non-tax income, the Institute for Fiscal Studies estimate there is still an unfunded overall pressure of £1.1 billion in 2020/21 that councils will be forced to absorb unless further funding is announced. 

The 2020 Spending Review outlines the Government’s spending plans for 2021/22 by setting budgets for each central government department.

Opted-in local government and police bodies, November 2020

This briefing covers the provisional local government finance settlement for 2021/22. We expect the final 2021/22 settlement to be laid before the House of Commons for its approval in late January or early February 2021.