Agenda item

The Chair invited Douglas Olley (Adviser - Local Government Finance) and Sarah Pickup (Deputy CEO, LGA) to provide an update in relation to Local Government Finance.

Douglas introduced the report which included key information on the spending review settlement, COVID-19 funding, and the upcoming budget, as well as detail on the announcements in the spending review and settlement.

-      Members expressed their concerns in relation to the financial burden on local authorities as a result of additional COVID-19-related pressures and loss of income and the need to press government for a comprehensive third-way funding package for local government to manage the ongoing, severe financial pressures.

-      It was acknowledged that communities and families all over the country had been hard-hit by the additional COVID-19-related pressures and increases in council tax and that relief should come from government funding, not by increasing council taxes. In many councils, there was a significant decrease in the amount of recoverable council tax and an increase in families applying for council tax support schemes.

-      Members commended local government staff and public health colleagues for their continued efforts in being resilient, hard-working, and flexible throughout the COVID-19 pandemic.

-      It was noted by Members that the amount of administration allowance received by councils from government was not significant enough to cope with the ever-changing lockdown and tiering system and that there was not an adequate amount of data available to support businesses and business owners.

-      The contain outbreak management fund had been allocated to upper-tier authorities and was not, in many cases, being passported down to district councils.

-      Members emphasised the importance of ensuring that those in need of temporary/emergency accommodation were supported, as well as colleagues in Revenues and benefits teams who were under a significant amount of pressure managing rent arrears and the additional costs associated.

-      The importance of ensuring that public health services received adequate funding during the COVID-19 pandemic was noted by Members.

-      Members acknowledged that businesses and business owners had been hard-hit by the lockdown measures that had been put in place as a result of the COVID-19 pandemic, and that many businesses were not eligible for the business support schemes.

-      It was noted by Members that many councils had been instructed by government to use additional restrictions grants to support businesses and business owners, despite the grant needing to last until March 2022. Members also noted that the grant system needed to be simplified and more comprehensive to ensure that all businesses and business owners were supported.

-      Although Members were mindful that every council faced different pressures in relation to service provision and funding, it was noted that an equitable scheme, suitable in all tiers of local government and all parts of the country, was much needed.

-      Members were keen for further information in relation to planning and preparing for the recovery phase of COVID-19, both in terms of the immediate support for staff, businesses, and business owners and what the current pressures would mean for future local authorities’ budgets.

-      Members emphasised the importance of focusing on future direction in relation to the spending review and the local government finance settlement.

-      Members acknowledged that spending additional monies during these unprecedented times would have a severe impact on future social, economic, and environmental costs and that there was a fundamental need to push back to government for extra financial support.

-      Sarah referred to the LGA’s reflection on the local government finance settlement and stated that whilst it was better than expected, and councils were granted more flexibility and power, it still meant that councils would face difficult decisions in terms of raising council taxes and placing a financial burden on residents.

-      In relation to ensuring that all COVID-19-related costs and lost income were covered by government, Sarah confirmed that the LGA continue to work closely with the Ministry of Housing, Communities and Local Government (MHCLG) to explore the returns on expenditure and income losses, lobby for additional funds where necessary and to ensure that funding for new burdens is addressed adequately.

-      Sarah emphasised the importance of continuing to address current pressures and briefly touched upon two key issues:

o   Adult Social Care (ASC) funding reform

o   The need to diversify funding sources for councils.

-        The Business Rates & Local Government Finance Reform Task & Finish Group would scrutinise and submit feedback to the Executive Advisory Board in relation to the range of work required going forward.

-      Sarah reassured Members of the Board that their comments would continue to be taken onboard and fed into discussions which related to the local government finance settlement.

-      In relation to the public health grant, Douglas confirmed that the LGA would continue to push for the grant to be announced as soon as possible and that discussions which related to the proliferation of the grants would continue.

The Chair summarised the discussion and stated that making a case to government, which emphasised the fact that council tax would not be an appropriate way of funding ASC long term, was crucial.

Decision

Members of the Resources Board noted the update.