Local Government Finance Settlement: CCN response

Today the government outlined its provisional Local Government Finance Settlement for 2018/19, which will be ratified in February.

Below, CCN responds to today’s announcement.

CCN Chairman Cllr Paul Carter said:

“This year’s finance settlement comes at the most challenging era for counties in recent memory and evidence shows that there are a significant proportion of county frontline services that are at risk. Counties collectively face a funding black hole of £2.54bn by 2021.

“We are therefore disappointed that the government has not heeded our calls for additional funding through the extension of transitional grants introduced in 2016. With no replacement announced for the vital £292m of transitional funding counties received over the past two years this further exacerbates the precarious position of rural county services. Without additional resources our member councils will be unable to safeguard some highly valued frontline services.

“Increasing council tax by an additional 1% could allow areas to raise some limited additional resource, but this is not a substitute for genuinely new funding and will further increase council tax burdens faced by county residents who already pay significantly more than other parts of the country. We welcome a consultation on removing negative Revenue Support Grant and a small £15m increase in the Rural Services Delivery Grant, but this will do little to ease the financial challenge next year.

“We hope the Government will look again at their decision not to extend transitional grants. CCN will be working with member councils and local MPs in the lead-up to the final settlement to highlight this critical issue.

“Looking ahead, the publication of the long-awaited fair funding review consultation is welcome and it is vital that it will be delivered in advance of the introduction of 75% business rates retention announced today. CCN has argued for a cost-drivers approach, one which funds local authorities on their basic present and future need and this consultation is a step in that direction. Ministers need to introduce a fair and simple methodology and we are keen to work with government to make sure this golden opportunity to reform local government funding is not missed.

 “Allowing councils to keep more of the resources they raise locally through business rates reform could provide the funding to close this gap, but we must ensure a workable system that provides sustainable funding to all councils.  

“In this vein, the announcement of the first county council business rates pilots are important in assessing the impact of full business rate retention in rural areas. We welcome the seven pilots involving counties and it is imperative that more counties benefit from further pilots the Secretary of State intimated he would take forward in the future.”

Re-read CCN’s submission to the settlement’s technical consultation here.