👏 Local Government Finance

• The session focused on motions related to local government finance in England for 2025-26, discussing the Local Government Finance Report and principles for council tax increases.

• The Minister for Local Government and English Devolution, Jim McMahon, highlighted the Government’s commitment to strengthening local government, pointing out a significant increase in core spending power to over £69 billion, which is a 6.8% increase in cash terms from the previous year.

• The final local government finance settlement aims to move away from competitive bidding for funds and towards stable multi-year financial settlements, responding to pressures primarily in social care and SEND provisions.

• Additional funding of £5 billion was announced, with specific increases for social care, SEND, and a £600 million recovery grant targeted at areas with the greatest demands and needs.

• Concerns were raised about the council tax system, with calls for its review due to its perceived regressive nature and outdated valuations. The Minister acknowledged the need for fairness but did not commit to immediate reforms.

• The issue of drainage costs, particularly in rural areas, was discussed, with a temporary increase in levy grants and a promise for a long-term solution.

• The debate touched on the varying impacts on urban versus rural areas, with some concern over the removal of the rural services delivery grant, though the Minister noted that rural areas would see an increase in core spending power.

• Several MPs highlighted the financial strains on their local councils, mentioning issues like national insurance contribution increases and the need for exceptional financial support.

• The Minister addressed the inherited financial challenges and stressed the importance of a new partnership between central and local government, including a commitment to a multi-year settlement in 2026-27 based on updated needs and resources.

• The session also covered the need for improved local government auditing and accountability, acknowledging the backlog and the Government’s plans to address these issues.

• Discussions included the impact of council tax increases on households and the need to balance these increases with service delivery needs.

• The session concluded with the approval of both motions, solidifying the financial framework for local government for the next year.

The parliamentary session on local government finance displayed moderate levels of disagreement, warranting a rating of 3 out of 5. This rating reflects the balance between areas of consensus and clear points of contention across the session.

• Examples of Disagreement:
  • Council Tax Increases: A notable point of contention was the rise in council tax. The hon. Member for Keighley and Ilkley (Robbie Moore) strongly opposed the government’s decision to allow a 9.9% increase in council tax without a referendum, criticizing it as a burden on hard-working families. This was countered by the hon. Member for Shipley (Anna Dixon), who argued that the rise was necessary due to the previous government’s cuts, pointing out the mismanagement by the local Labour authority.
  • Rural vs. Urban Funding: There were discussions about the fairness of funding distribution between rural and urban areas. The hon. Member for Glastonbury and Somerton (Sarah Dyke) expressed concerns about rural areas being underfunded compared to urban councils, a sentiment echoed by other members like the hon. Member for North Herefordshire (Ellie Chowns). The Minister and other speakers acknowledged these concerns but highlighted the efforts to increase funding for all areas, albeit at different rates.
  • Employers’ National Insurance Contributions: The increase in employers’ national insurance contributions was another contentious issue, with members like the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) pointing out the additional costs to local authorities. The Minister and the Local Government Minister responded by explaining the allocated funding to help mitigate these costs, but the adequacy of this response was debated.
  • Council Tax System: Multiple members, including the hon. Member for Hartlepool (Mr Jonathan Brash) and the hon. Member for Woking (Mr Will Forster), criticized the current council tax system as regressive and outdated, suggesting a need for reform. The Local Government Minister mentioned the government’s willingness to listen to arguments but did not commit to immediate reforms.
• Areas of Consensus:
  • Recognition of Local Government Challenges: There was a broad agreement on the challenges faced by local governments, particularly after years of underfunding and austerity. This was acknowledged by members across the political spectrum, including the hon. Member for Thirsk and Malton (Kevin Hollinrake) and the hon. Member for Sheffield South East (Mr Clive Betts).
  • Need for Multi-Year Settlements: The importance of moving towards multi-year financial settlements was another area where there was consensus. Both the government and opposition benches supported this initiative as a means to provide stability and better planning for local authorities.
  • Value of Local Councillors: There was agreement on the need to value and support local councillors, with several members, including the hon. Member for Middlesbrough and Thornaby East (Andy McDonald), advocating for better compensation and pension rights for councillors.

Overall, while there were significant disagreements, particularly around the specifics of funding allocations and taxation policies, there was also considerable common ground on acknowledging and addressing the broader challenges faced by local governments. The session’s tone was mainly constructive, with members seeking to find solutions despite their differences.