Asked by: Lord Laming (Crossbench - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government what steps they are taking to ensure that local authorities facing budgetary problems continue to fulfil their statutory responsibilities.
Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)
The Government recognises the significant pressures that councils are facing. This Spending Review provides over £5 billion of new grant funding over the next three years for local services that communities rely on. The Government is committed to ensuring that funding is targeted effectively at the places and services that need it most and allocated in a way that empowers local leaders to deliver against local priorities. This includes committing to multi-year allocations for each council through the upcoming 2026-27 Local Government Finance Settlement (LGFS) and moving to a more up-to-date assessment of each council’s needs and resources.
Councils are responsible for their own financial management, and the department does not monitor their day-to-day business. Any council that has concerns about its ability to set or maintain a balanced budget should approach the department in the first instance.
Asked by: Lord Laming (Crossbench - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government what assessment they have made of the report from the Local Government Information Unit, The State of Local Government Finance in England 2024, published on 28 February, which suggests that half the councils in England will face bankruptcy within the next Parliament.
Answered by Baroness Scott of Bybrook - Shadow Minister (Housing, Communities and Local Government)
I refer the Noble Lord to the written statement made by the Secretary of State for Levelling Up, Housing and Communities HCWS241 and by the Minister for Local Government HCWS300 on 5 February.
The final Local Government Finance Settlement for 2024-25 makes available up to £64.7 billion, an increase in Core Spending Power of up to £4.5 billion or 7.5% in cash terms on 2023-24 – an above inflation increase. This Settlement includes additional measures worth £600 million announced on 24 January.
On the 29 February, the Government published details of financial flexibilities agreed with a small number of other councils that requested financial support on an exceptional basis, due to specific local issues that they are unable to manage themselves. Nearly three quarters of the support announced relates to six councils where there has been severe local failure, forcing the government to step in and take action through statutory intervention.
As a result of this action by Government, we anticipate that all councils will be able to set a balanced budget and continue to deliver vital services for their communities.
Asked by: Lord Laming (Crossbench - Life peer)
Question to the Ministry of Housing, Communities and Local Government:
To ask His Majesty's Government what steps they are taking to provide support to local authorities in financial difficulty.
Answered by Baroness Penn
We monitor the financial health of local authorities closely, including through extensive direct engagement with councils. We stand ready to speak to any council that has concerns about its ability to manage its finances, or that faces pressures it has not planned for.
The provisional local government finance settlement for 2024-25 makes available up to an additional £3.9 billion to local authorities in England, an increase of 6.5% in cash terms on 2023-24. We have launched a consultation on the provisional settlement, which closes on 15 January 2024.