Council funding: MPs debate local government settlement

Bin men collecting rubbish in Rainham, Essex, in 2009

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Councils say a more sustainable funding model is needed to ensure services continue

MPs are to debate how much England’s councils will have to spend in the next financial year, after local authorities complained of a £3bn funding gap.

Ministers allocated £1.6bn more than planned, with one-off funds of £650m for social care and £420m for roads.

Communities Secretary James Brokenshire said the funding available amounted to a “real-terms increase” in resources.

But the Local Government Association (LGA) has said “huge uncertainty” remains over the provision of services.

Mr Brokenshire confirmed last week the government would allow council tax rises of up to 3%, while authorities would retain more of their local business rates.

Ahead of Tuesday’s debate, he told the BBC: “The settlement this year is a real-terms increase in funds available to councils… to meet some of those challenges, particularly on things like social care both for adults and children, where the funding pressures have really grown.”

The government’s measure, showing a 2.8% increase in “core spending power” to £46.4bn, includes an estimate of council tax revenue.

However, the total grant allocation is down more than £1bn on 2018/19 and BBC social affairs correspondent Michael Buchanan said council budgets would shrink by almost 6%, meaning more services would have to be cut.

The independent Institute for Fiscal Studies calculates that poorer council areas will lose more money that richer authorities.

And Labour’s communities spokesman Andrew Gwynne wrote in the Daily Mirror: “The government should be investing in our most in-need areas – but they are cutting them even harder.”

LGA chairman Lord Porter said: “The money councils have to provide local services is running out fast and there is huge uncertainty about how they will pay for them into the next decade and beyond.”

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