Select committee: Housing, Communities and Local Government Committee
Recommendation 8
Second Report - Local authority financial sustainability and the section 114 regime
Published 19 Jul 2021
Paragraph 37
Addressed to Ministry of Housing, Communities and Local Government
Housing, Communities and Local Government Committee Local Authority Financial Sustainability and the Section 114 Regime All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We recommend that the Government widen the funding base of local government to make it less vulnerable to shocks such as the covid-19 pandemic, including by giving councils more flexibility over local taxes and other revenue-raising powers. This would also align with giving local authorities more powers over spending, which we will consider in our future report on devolution in England. Giving local government more powers to raise and spend money is a position supported by our predecessor Committee. We also recommend that the Government reform business rates, in particular by finding a mechanism by which to level the playing field between bricks- and-mortar and online retailers. This is an issue we will return to in our upcoming report on supporting high streets after covid-19.
From: Housing, Communities and Local Government Committee, Second Report - Local authority financial sustainability and the section 114 regime (HC 33), paragraph 37, 19 July 2021
Government response
The government responded to the whole report on 21 October 2021 (deadline 19 September 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government welcomes the Committee's report and responds recommendation by recommendation, agreeing on some audit and funding-stability points while setting out its existing approach on council tax, business rates and the section 114 regime.
- On social care, it points to its 7 September 2021 announcement of an additional £5.4 billion over 3 years and says it will publish further detail in a White Paper "later this year".
- On council tax, it states it "has no plans to replace or fundamentally reform council tax", saying a revaluation "would be expensive to undertake" and could raise bills for many households.
- On multi-year settlements, it "agrees that a stable funding environment ensures local authorities can plan effectively"; the approach to the next settlement "will be informed by the ongoing Spending Review".
- On local audit, it considers PSAA "best placed" as appointing body and will keep arrangements "under review". It agrees the new system leader should be able to join up auditor findings.