{"id":88827,"date":"2018-02-07T18:34:00","date_gmt":"2018-02-07T18:34:00","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=b9351809b0de3333ada1ee7e2beac464"},"modified":"2018-02-07T18:34:00","modified_gmt":"2018-02-07T18:34:00","slug":"statement-to-parliament-final-local-government-finance-settlement-2018-to-2019","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=88827","title":{"rendered":"Statement to Parliament: Final local government finance settlement 2018 to 2019"},"content":{"rendered":"
\n

Introduction<\/h2>\n

Madam Deputy Speaker, every day, local government delivers vital services for the communities they serve.<\/p>\n

Services that many of us take for granted.<\/p>\n

Provided by dedicated, often unsung councillors and officers in places that we are proud to call home.<\/p>\n

As such \u2013 as I have said before \u2013 local government is the frontline of our democracy.<\/p>\n

And deserves the resources it needs to do its job and deliver truly world-class services.<\/p>\n

To that end, we published a provisional settlement<\/a> for funding local authorities in England late last year.<\/p>\n

Consultation<\/h2>\n

And invited people to give their views on this via a formal consultation<\/a> \u2013 to which we have received almost 160 responses.<\/p>\n

My ministers and I have also engaged extensively with the sector\u2026<\/p>\n

\u2026with individual councils and their MPs and also the Local Government Association and other representative groups.<\/p>\n

Ensuring that we were available to speak to anyone who wanted to raise particular issues or ask questions.<\/p>\n

And I want to pay tribute to my Honourable Friend for Nuneaton for his sterling work in this area over\u2026<\/p>\n

\u2026not just this period, but the past 3 years.<\/p>\n

And to thank my Honourable Friend for Richmond (Yorkshire), who recently joined my department, for picking up the baton.<\/p>\n

I am immensely grateful to everyone who has contributed to the consultation and our wider engagement with the sector.<\/p>\n

Settlement<\/h2>\n

This work has informed the final settlement<\/a> which I am unveiling today.<\/p>\n

Part of a 4-year settlement that gives English councils access to over \u00a3200 billion in funding in the 5 years to 2020.<\/p>\n

That gives them greater freedom and flexibility over the money they raise\u2026<\/p>\n

\u2026in recognition of the fact that no-one knows their local areas \u2013 the opportunities, the challenges, the pressures – better than the councils who serve them.<\/p>\n

And that strikes a balance between relieving growing pressure on local government\u2026<\/p>\n

\u2026whilst ensuring that hard-pressed taxpayers do not face ever-increasing bills.<\/p>\n

Madam Deputy Speaker, the settlement comes in the third year of a 4-year deal that was accepted by 97% of councils in return for publishing efficiency plans.<\/p>\n

This gives them the certainty and stability they need to plan for the future.<\/p>\n

Many local authorities have done impressive work to deliver better value for money.<\/p>\n

And are setting an example to other parts of the public sector.<\/p>\n

And we are keen to continue to work with sector; to increase transparency and share best practice\u2026<\/p>\n

\u2026so that councils can deliver increased efficiency and, over the coming years, transform services.<\/p>\n

I expect this work to have a tangible impact on the steps councils take to promote efficiency by 2019 to 2020.<\/p>\n

In all, this settlement answers calls from councils, over many years, for greater control over the money they raise\u2026<\/p>\n

\u2026and the tools to make this money go further.<\/p>\n

And this is the approach we have taken across the board: listening to local authorities and responding to what we hear.<\/p>\n

Fair funding review<\/h2>\n

Starting with creating a whole system of local government finance that\u2019s fit for the future.<\/p>\n

The current formula for financial allocations has served local areas well over the years.<\/p>\n

But a world of constant change \u2013 involving big shifts in demographics, lifestyles and technology\u2026<\/p>\n

\u2026demands an updated and more responsive way of distributing funding.<\/p>\n

We have to question the fairness of the current system.<\/p>\n

Which is why I was pleased to launch a formal consultation<\/a> on a review of councils\u2019 relative needs and resources in December.<\/p>\n

This is not just a paper exercise.<\/p>\n

We have an unparalleled opportunity to be really bold and ambitious.<\/p>\n

To consider, with the sector, where the most up-to-date data and evidence leads as regards drivers of local authority costs.<\/p>\n

And to create a whole new system that gives councils the confidence to face the opportunities and challenges of the future.<\/p>\n

The consultation closes on 12 March.<\/p>\n

And I urge all those with a stake in this system to make their voices heard.<\/p>\n

We aim to introduce this new approach in 2020 to 2021.<\/p>\n

Business rates retention<\/h2>\n

Which is also when the latest phase of our business rates retention programme gets underway.<\/p>\n

A programme that gives local authorities powerful incentives to grow their local economies.<\/p>\n

And that has so far been a resounding success.<\/p>\n

Under the current scheme, local authorities estimate that they will receive around \u00a31.3 billion in business rates growth in 2017 to 2018.<\/p>\n

A significant revenue stream on top of the core settlement funding that I\u2019m talking about today.<\/p>\n

So it\u2019s right that we\u2019re going further.<\/p>\n

Our aim is for local authorities to retain 75% of business rates from 2020 to 2021.<\/p>\n

This will be achieved by incorporating existing grants into business rates retention\u2026<\/p>\n

\u2026including Revenue Support Grant and the Public Health Grant.<\/p>\n

Local authorities will be able to retain 75% of the growth in their business rates from the new baselines in 2020 to 2021, when the system is reset.<\/p>\n

The long-term plan is to allow local government to keep 100% of its business rates.<\/p>\n

And, with that in mind, I announced an expansion of the 100% retention pilots that have proved so popular in December.<\/p>\n

As a result, we will be taking forward 10 new pilots, covering 89 authorities, instead of the 5 we originally planned.<\/p>\n

A further pilot will also begin in London in 2018\/19 and existing devolution pilots will continue in 2018 to 2019.<\/p>\n

This will help us see how well the system works across a broad range of areas and circumstances\u2026<\/p>\n

\u2026in the North and South, urban and rural, small and large.<\/p>\n

These pilots will keep 100% of the growth in their business rates if they expand their local economies – double what they can keep now.<\/p>\n

I can confirm that I will open a further bidding round for pilots in 2019 to 2020 in due course.<\/p>\n

As I said, in expanding these pilots, we have responded to what councils have told us.<\/p>\n

And we are doing the same in other areas.<\/p>\n

Rural Services Delivery Grant<\/h2>\n

Rural councils, for example, expressed concern about the fairness of the current system\u2026<\/p>\n

\u2026with the Rural Services Delivery Grant due to be reduced next year.<\/p>\n

In response, I can confirm today that we will increase the Rural Services Delivery Grant by \u00a331 million in 2018\/2019.<\/p>\n

\u00a316 million more than proposed in the provisional settlement.<\/p>\n

This takes the total figure to \u00a381 million – the highest amount ever paid in rural grant.<\/p>\n

A little over the sum paid in 2016 to 2017.<\/p>\n

Negative RSG<\/h2>\n

We also recognise that so-called \u201cnegative RSG\u201d is causing concern.<\/p>\n

This is a situation where changes in revenue support grant have led to a downward adjustment\u2026<\/p>\n

\u2026of some local authorities\u2019 business rates top-up or tariff for 2019 to 2020.<\/p>\n

We know that we must address this problem and will consult formally on fair and affordable options for doing so\u2026<\/p>\n

\u2026with plenty of time to reflect on the findings before next year\u2019s settlement.<\/p>\n

Capital receipts<\/h2>\n

And, following discussions with the sector, we are also continuing the capital receipts flexibility programme for a further 3 years.<\/p>\n

This scheme gives local authorities the continued freedom to use capital receipts from the sale of their own assets\u2026<\/p>\n

\u2026to help fund the transformation of services and release savings.<\/p>\n

New Homes Bonus<\/h2>\n

We have also responded to concerns about proposed changes to the New Homes Bonus.<\/p>\n

By the end of 2018 to 2019, we will have paid out \u00a37 billion under this scheme to reward the building of 1.4 million homes.<\/p>\n

This includes \u00a3947.5 million for 2018 to 2019.<\/p>\n

However, when we consulted last year on proposals to link NHB<\/abbr> payments to the number of successful planning appeals\u2026<\/p>\n

\u2026it was clear from this that sector wanted continuity and certainty.<\/p>\n

And so that is what we have delivered, with no new changes to the NHB<\/abbr> this year and a baseline maintained at 0.4%.<\/p>\n

Planning fees<\/h2>\n

Furthermore, as set out in our Housing White Paper, we are enabling local authorities to increase planning fees by 20%\u2026<\/p>\n

\u2026where they commit to investing the extra income in their planning services.<\/p>\n

This should provide a welcome boost to local planning authorities and address concerns about under-resourcing.<\/p>\n

Valuation Office Agency (VOA<\/abbr>)<\/h2>\n

The final settlement includes small adjustments to top-up and tariffs for authorities based on corrected VOA<\/abbr> data.<\/p>\n

Now I know that my opposite number \u2013 for today – has been trying to make some mischief on this point.<\/p>\n

So let me spell it out clearly for him one last time.<\/p>\n

The provisional settlement was based on the VOA<\/abbr>\u2019s official statistics \u2013 the best published data available at the time.<\/p>\n

Ahead of the provisional settlement, officials were notified of an error in the VOA<\/abbr> data.<\/p>\n

Ministers were not told about this until 15 January, as officials did not know what, if any, changes might have to be made\u2026<\/p>\n

\u2026to individual authorities\u2019 tariffs and top-ups.<\/p>\n

The Honourable Gentleman will know that the moment corrected statistics were published by the VOA<\/abbr>\u2026<\/p>\n

\u2026revised figures were provided to local authorities to enable them to finalise their budgets.<\/p>\n

He should also know that part of the reason for the publication of a provisional settlement\u2026<\/p>\n

\u2026is to test the numbers and make adjustments.<\/p>\n

[political content removed]<\/p>\n

Housing Infrastructure Fund<\/h2>\n

Madam Deputy Speaker, councils have a crucial role to play in helping deliver the homes our country desperately needs.<\/p>\n

However, we all know that we can\u2019t achieve this without having the right infrastructure in place\u2026<\/p>\n

\u2026the schools, the GP surgeries, the transport links and other essentials.<\/p>\n

The private sector can go some way to delivering this, but it\u2019s clear we have to raise our game on this to match our ambitions.<\/p>\n

Which is why we set up the Housing Infrastructure Fund last July\u2026<\/p>\n

\u2026to support local authorities to provide this infrastructure and build more homes.<\/p>\n

In the end, we received a staggering 430 bids, worth almost \u00a314 billion, to deliver 1.5 million homes.<\/p>\n

Demonstrating the incredible ambition that is out there to tackle the housing crisis\u2026<\/p>\n

\u2026an ambition that we are keen to get behind and fully back.<\/p>\n

Hence our move to more than double the Housing Infrastructure Fund at Autumn Budget\u2026<\/p>\n

\u2026dedicating an additional \u00a32.7 billion of funding, bringing the total Fund to \u00a35 billion.<\/p>\n

And last week I was delighted to announce the first funding allocation\u2026<\/p>\n

\u2026\u00a3866 million for 133 successful projects involving 110 councils that will unlock up to 200,000 homes.<\/p>\n

That promise to deliver a strong pipeline of homes at pace and scale.<\/p>\n

And that represent another important step towards meeting one of the defining challenges of our time\u2026<\/p>\n

\u2026as are the measures we are taking on social care.<\/p>\n

Adult social care<\/h2>\n

I am under no illusions about the pressures that councils face in addressing this; one of the single biggest issues we face as a country.<\/p>\n

Which is why we\u2019ve put billions of pounds of extra funding into the sector over the past 12 months.<\/p>\n

And I can today announce a further \u00a3150 million for an Adult Social Care Support Grant in 2018 to 2019.<\/p>\n

This will be allocated according to relative needs and will help councils build on their work to support sustainable local care.<\/p>\n

It comes on top of an additional \u00a32 billion announced for adult social care over the next 3 years at Spring Budget.<\/p>\n

And with the freedom to raise more money more quickly through the use of the social care precept that I announced this time last year\u2026<\/p>\n

\u2026we have given councils access to \u00a39.4 billion more dedicated funding for adult social care over 3 years.<\/p>\n

But we know that there is much more to do \u2013 and that funding alone is not going to help us fix this.<\/p>\n

This is a long-term challenge that requires long-term systemic change.<\/p>\n

The publication of a green paper this summer on future challenges within adult social care will set us on the path to securing this.<\/p>\n

Council Tax<\/h2>\n

And, finally, we are responding to calls for more flexibility over setting Council Tax.<\/p>\n

Local authorities will be able to increase their core Council Tax requirement by an additional 1% without a local referendum\u2026<\/p>\n

\u2026bringing the core principle in line with inflation.<\/p>\n

This will enable them to raise revenue to meet growing demand for their services whilst keeping taxes low.<\/p>\n

Having done away with Whitehall capping, we have enshrined these checks and balances into the system.<\/p>\n

Under the Localism Act, local government can increase Council Tax as they wish\u2026<\/p>\n

\u2026but excessive rises need to be approved by local residents in a referendum.<\/p>\n

In addition, directly elected mayors will decide the required level of precept by agreement with their combined authorities.<\/p>\n

And it will be easier for police and crime commissioners to meet local demand pressure under measures that I have agreed with the Home Secretary.<\/p>\n

These allow for a \u00a312 Council Tax flexibility for police services – raising an additional \u00a3139 million next year.<\/p>\n

We will, however, defer the setting of referendum principles for town and parish councils for 3 years and keep this under review.<\/p>\n

In all, I want to see the sector doing everything possible to limit Council Tax increases and show restraint.
\nI am keen to ensure that these freedoms are not abused \u2013 as, I am sure, are voters.<\/p>\n

Conclusion<\/h2>\n

Madam Deputy Speaker, my department\u2019s name recently changed to the Ministry of Housing, Communities and Local Government.<\/p>\n

This underlines our focus on fixing our broken housing market and getting Britain building.<\/p>\n

But I remain absolutely committed to the Community and Local Government elements of our work.<\/p>\n

They are the foundations on which everything else stands.<\/p>\n

It is not enough to just build more homes. We need to build better, strong communities.<\/p>\n

And councils acting truly as local government and not local administration will help us achieve this.<\/p>\n

Which is why we have listened to local authorities.<\/p>\n

And through this settlement delivered what they have asked for while keeping spending in check:<\/p>\n

A real terms increase in resources over the next 2 years.<\/p>\n

More freedom and fairness.<\/p>\n

Greater stability and certainty to plan and drive value for money.<\/p>\n

They \u2013 and the communities they serve \u2013 deserve no less.<\/p>\n

I commend this settlement to the House.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Sajid Javid, Secretary of State for Housing, Communities and Local Government unveils the final local government finance settlement.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/88827"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=88827"}],"version-history":[{"count":1,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/88827\/revisions"}],"predecessor-version":[{"id":88840,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/88827\/revisions\/88840"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=88827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=88827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=88827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}