Local Government Finance

Parliament yesterday approved the funding settlement for English local authorities that will see a real terms increase in available resources over the next two years and give them access to over £200 billion from 2015 to 2020 to deliver the high-quality services their local communities need.

The settlement gives councils additional financial freedoms to deliver services for their most vulnerable residents while protecting council tax payers from excessive increases in their bills.

For the coming financial year (2018/2019), Reading will have Core Spending Power of £129.5 million, an increase of £3 million or 2.4% and West Berkshire will have Core Spending Power of £116.8 million, an increase of £1.3 million or 1.1%.

Ahead of today’s Parliamentary debate, the Government had announced extra funding to help local authorities meet the needs of vulnerable people and support services in rural areas.

Following representations from local government and Members of Parliament on the provisional funding plans announced in December, a further £150 million will be available to those councils providing Adult Social Care.

In addition, £16 million will be made available to councils providing services in rural areas, taking the total Rural Services Grant to £81 million - the highest it has ever been and a recognition of the cost of providing local services in sparsely populated areas.

For Reading, this additional funding amounts to £0.4 million and for West Berkshire £0.3 million.

Reading and West Berkshire will also benefit from being confirmed as part of one of 10 new business rates retention pilot areas. These areas will keep 100% of growth in business rates, which will stay in communities and be spent on local priorities. This is estimated to generate an additional £35.7 million in funding across the pilot area and is not included in Core Spending Power.

Secretary of State for Housing, Communities and Local Government, Sajid Javid said:

“Parliament has approved a settlement that strikes a balance between relieving growing pressure on local government whilst ensuring that hard-pressed taxpayers do not face excessive bills. We have listened to representations made and delivered on these requests: two years of real terms increases in resources, more freedom and fairness, and greater certainty to plan and secure value for money.”

Local Reading West MP, Alok Sharma, welcomed the Settlement, saying: “I welcome the new funding settlement which will make a real difference to the core spending powers of both Reading and West Berkshire Councils. Having lobbied both the Chancellor and the Communities Secretary I am of course delighted that Reading and West Berkshire were selected to be part of one of ten new business rates retention pilot areas, this means that they will keep 100% of growth rates which can fund amenities important to the community.

Government has also launched a review of local authorities’ needs and resources to enable a new funding system to be devised. Ministers are encouraging local authorities to respond to the consultation ahead of the deadline on 12 March 2018.

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