LGA Governance


Agenda item

Agenda item

2019 Spending Round and 2020 Spending Review

To follow on a supplemental agenda.

Minutes:

Sarah Pickup introduced the report. She emphasised the LGA’s approach to the one-year announcement which had been to call on the Government to meet the funding gap, particularly in social care and Special Educational Needs and Disabilities (SEND) services, and the need for certainty including the continuation of all current funding streams. The LGA's work in advance of the 2020 Spending Review would continue.

 

The announcements provided for a funding package of £3.5 billion for council services including £1 billion new money for social care and £700 million for SEND, a proposed council tax referendum limit of 2 per cent and additional adult social care precept of 2 per cent. A one year delay in the implementation of further business rates retention and the Fair Funding Review has also been announced.

 

Members made the following comments:

·         sought clarification on the distribution of the £1 billion social care grant, and asked when further information would be known on allocations.

·         Welcomed the additional money for SEND but pointed out it was already being subsidised from outside the Dedicated Schools Grant.

·         On the 2 per cent referendum limit, some had built in an assumption of 3 per cent so would have to fill the gap. Others pressed for shire districts to have a £5 limit or to have the same limit as PCCs.

·         asked about the status of negative RSG.

·         Raised concerns about the future of the New Homes Bonus

·         Councils were facing demands of homelessness and rough sleeping and inflation including wage pressure.

·         Suggested the LGA should argue for more freedoms and flexibilities including charging for blue badges and single person discounts.

·         Some felt that the LGA should have been more cautious in its reaction to the announcement. Others thought that the tone of the LGA response was correct.

·         We should remember that council tax was not external funding.

 Sarah Pickup responded to the points made:

·         The LGA had reacted to a better than expected one year settlement - which confirmed current funding streams, met new pressures and inflation and provided some funds in recognition of underlying pressures. We are clear that it does not address our need for a sustainable, long term funding solution but recognise it as a good one year deal.

·         On SEND we have been clear that there is an underlying problem and welcome the review. 

·         The social care grant may be distributed on the basis of the adults social care relative needs formula or it is possible there may be an element of the grant that is distributed in a way that takes into account the ability to raise income through council tax. We had also sought clarification as to whether the £1bn is in the base going forward.

·         We understand that negative RSG is in the base for next year but she noted that once increased business rates retention comes in this issue will be overtaken by new distribution mechanisms and any issues will need to be addressed through transitional arrangements.

·         On council tax referendum limits, she said we were pushing for the continuation of the £5 higher limit for shire districts and believe this is likely to continue.

·         She noted shire districts would benefit from another year of retention gains under the 50 per cent system as the reset has been deferred which had been something DCN had called for.

·         We understood that New Homes Bonus would be confirmed for 2020/21 for one year only, further details would be in the technical consultation. A review would be undertaken to determine future arrangements.

·         She noted that the public health grant is due to roll into business rates in 2021 and the formula may change at that point.

·         We are expecting a technical consultation on the 2020/21 settlement before the end of September which should set out consultation proposals on the distribution of the new adult social care grant, arrangements for the New Homes Bonus and council tax referendum principles amongst other things.

·         Confirmation that freedoms and flexibilities, and access to new forms of income remained part of our campaign for the 2020 Spending Review.

 

Members thanked Sarah for the update and asked for her comments to be circulated to the Board ahead of the full minutes.

 

Decision

 

Members noted the report.   

 

Supporting documents: