Early in the new year, local authorities across the country will be expected to set their budgets for the forthcoming year. Ever since the Chancellor's Budget, councils have been anticipating having to deal with a myriad of funding challenges to fill the black hole in funding that had been created.
It did not help, therefore, that the Labour Government was not forthcoming with details for the funding settlement for the next financial year. Indeed, it wasn’t until the penultimate day of parliament that we got sight of their plans.
Chief among the measures outlined in this month’s statement was a commitment to rising council tax, confirmation that the Rural Services Delivery Grant was being scrapped and that they had no plan to help council fill the £2.4 billion funding black hole.
The gap in funding is especially important as local authorities are faced with the challenge of coming up with the cash for the Employers' National Insurance hike. Independent research conducted by the Local Government Association found that it will cost the sector over £1.7 billion. Local government leaders are naturally disappointed after repeated reassurances that they would received the support needed.
This sadly has a direct knock-on effect on local residents. With councils lacking the required support, the Labour Government is allowing councils to increase by five percent, meaning that the average household faces an above-inflation increase of more than £100 to their council tax bills in 2025. I am concerned that this will be matched, or exceeded, by our Labour mayor increasing the precept he takes on top.
In contrast, the Conservatives increased funding for local authorities by £4.5 billion, helping them continue to deliver the key services we all rely on day-to-day.
I was keen to highlight the plight of local government during an oral statement today in Westminster, which you can view here. As we enter the Christmas period, many local leaders will be facing tough decisions on which services they protect and which residents will lose out as a result of the choices made by the Government.
