Government builds full council tax increase into Local Government funding settlement for 2024/25

Government builds full council tax increase into Local Government funding settlement for 2024/25

On Monday, the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, published the Provisional Local Government Finance Settlement 2024-25. While officially increasing the maximum funding to Councils for 2023/24 by 6.5%, Bassetlaw will only see a below inflation increase of 4.5%.  The Government’s settlement assumes that all local authorities will increase council tax by the maximum allowed, meaning financial support for local government is increasingly falling on residents who are already managing cost-of-living pressures.

The Local Government Association (LGA), which is the national voice of local government, has warned that “the settlement does not provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year”. Collectively, councils in England are estimated to face a funding gap of £4 billion over the next two years. There have been several high-profile cases of councils submitting Section 114 notices in the past few months including Nottingham and Birmingham City Councils which confirms that they expect expenditure for the current financial year to exceed income which is unlawful.

Bassetlaw District Council Leader, James Naish, said “while our finances remain in a relatively stable position, we aren’t shielded from the pressures being experienced by so many councils across the country. It is frustrating that with inflation stubbornly remaining above the Bank of England’s target, the Government hasn’t provided any meaningful new funding to help councils seeking to provide important front-line services. This is especially true of District Councils like Bassetlaw which will receive a lower spending power increase than other councils as it won’t receive any additional income through the adult social care precept. “

The LGA has historically argued that council tax rises cannot be an effective solution to the long-term pressures faced by councils, particularly in social care. Increasing council tax raises different amounts of money in different parts of the country, unrelated to need. The data suggests that Bassetlaw’s core spending power in 2024/25 will increase by 4.5% which was below October’s CPI inflation figure of 4.6%. It ranks Bassetlaw 327rd out of the 349 local authorities based on percentage increases to its core spending power vs. 2023/24 levels.

Based on a Band D property in Bassetlaw in 2023/24, only 8.38% of the council tax bill goes to the District Council. The rest goes to Nottinghamshire County Council (64.46%), Nottinghamshire Police (11.62%), Adult Social Care (9.92%, also Nottinghamshire County Council), Nottinghamshire Fire & Rescue Service (3.87%) and Parish Councils (1.75%).

While Levelling Up Secretary Michael Gove said the “real-terms increase … demonstrates how the Government stands behind councils up and down the country”, the County Councils Network (CCN) said its members would be “bitterly disappointed”, with finance spokesperson Councillor Barry Lewis saying the CCN “had put together a strong case for emergency funding next year to address the significant financial headwinds councils face which are outside of our control”.

Cllr Naish continued: “Once again, we are faced with a one-year settlement for local government, the sixth in a row. This limits our ability to plan ahead and creates a culture of councils needing to maximise increases while they are on the table, not knowing what the Local Government Finance Settlement will be the following year. Along with councils of all political colours, we call on the next Government to change the short-term approach to local government funding so councils can effectively forward plan to maximise spending returns while keeping any cost increases as low as possible for local residents and businesses”.

 


Last Updated on Wednesday, January 10, 2024