Source · Select Committees · Housing, Communities and Local Government Committee
Third Report - Financial distress in local authorities
Housing, Communities and Local Government Committee
HC 56
Published 1 February 2024
Recommendations
8
Acknowledged
Para 51
Limit capital funding flexibilities to invest-to-save and closely monitor uptake for unintended consequences.
Recommendation
The Government should ensure that the implications of any additional flexibilities it grants on capital funding are carefully considered. We recommend that these are limited to extending flexibilities over invest-to-save activity only. The Government must closely monitor local authorities’ uptake …
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Government Response Summary
The government states it is considering responses to its call for views on capital flexibilities, acknowledging the need for balance to prevent unsustainable financial practices. It will publish a response before the summer recess but does not commit to the specific limitations or monitoring mechanisms requested at this stage.
Ministry of Housing, Communities and Local Government
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25
Acknowledged
Maintain Local Housing Allowance rates at 30th percentile of market rents annually
Recommendation
We recommend that the Government reconsider its position on re-freezing local housing allowance rates from 2025–26 onwards. Instead, the Government must maintain LHA rates at least at the 30th percentile of local market rents each year to ensure that those …
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Government Response Summary
The government acknowledges the importance of stable housing and commits to reviewing Local Housing Allowance rates every year, considering factors like local rents and the broader fiscal context. It highlights the £1.2 billion investment from April 2024 to increase LHA rates to the 30th percentile, but does not commit to maintaining this level annually from 2025-26 onwards.
Ministry of Housing, Communities and Local Government
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Conclusions (2)
6
Conclusion
Acknowledged
Para 49
We have previously recommended that the Government widens the funding base of local authorities and grants more flexibility over local taxes and other revenue raising powers. We therefore welcome the Government’s call for views on local authority capital flexibilities and believe that additional flexibilities may play a useful role in …
Government Response Summary
The government confirms it launched a call for views on local authority capital flexibilities to encourage invest-to-save activity and is considering responses. A publication is expected before the summer recess, and some financial flexibilities have been agreed with specific councils.
26
Conclusion
Acknowledged
The Government elected in the next UK General Election is faced with the task of designing and implementing a series of fundamental reforms to the way in which local authorities are funded, the services that they are currently required to deliver, and the way in which these services are delivered. …
Government Response Summary
The government acknowledges the need to improve the local government finance system in the next Parliament and commits to significant consultation, but explicitly states it does not support land value taxation.