Provisional finance settlement published

Additional funding for adult and children’s social care and a new £111 million ‘lower-tier services’ grant for districts and unitaries were among the announcements in last month’s provisional local government finance settlement for England.

But while the settlement envisages a potential 4.5 per cent increase in local government’s core spending power, more than 85 per cent of that is dependent on councils increasing council tax by up to 5 per cent in 2021/22.

LGA Chairman Cllr James Jamieson warned this would leave councils facing a tough choice about whether to increase bills to protect vital local services when “we are acutely aware of the significant burden that could place on some households”.

He added: “It is good to see that the provisional settlement provides extra money to meet COVID-19 costs, new funding for adult and children’s social care, and for councils with responsibility for services such as homelessness, planning, recycling and refuse collection, which will help meet cost and demand pressures next year. 

“However, the ability to bring in extra council tax remains a sticking plaster and not a long-term solution. It falls short of the sustainable long-term funding that is needed to improve the services our communities and local economies will need to recover from the pandemic.”

The LGA says councils need “clarity and certainty” about how all local services will be funded in the medium term. It is calling for a three-year settlement from 2022, and “meaningful progress” towards a long-term, sustainable solution to the adult social care funding crisis. 

With the Budget scheduled for 3 March, the LGA will be making the case for investment in the council services that have been so crucial in the fight against COVID-19 and recovery.

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