Council Tax
The question
To ask the Secretary of State for Housing, Communities and Local Government, what assessment he has made of the financial sustainability of local authorities that are implementing the maximum permitted council tax increase while also delivering more than £25 million of in-year service reductions; what information his Department holds on the number of councils that have both increased council tax by 4.99% and reduced services in excess of £25 million in the same financial year; and what monitoring his Department undertakes of council tax increases, reserves usage and projected future budget gaps.
Answered by Alison McGovern
It is for individual local authorities to decide their level of council tax, including whether to use their full flexibility and balancing the extra spending with the impact on taxpayers. Local authorities are expected to manage their financial position prudently, and the department does not monitor their day-to-day business.
The department does not proscriptively set a level of expected reserves for local authorities to hold and is clear that that this should be a locally managed decision. We rely on local authorities to accurately reflect their reserve positions in the Revenue Outturn forms to ensure we have good quality data in the department to understand the reserves the sector hold.
The recent Local Government Finance Settlement is our most significant step yet to make English local government more sustainable. We are delivering fairer funding, targeting money where it is needed most through the first multi-year Settlement in a decade. The department will continue to have a framework in place to support those in the most difficult positions. Any council that has concerns about its ability to set or maintain a balanced budget should approach the department in the first instance.
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