The government announced the first ever three-year funding settlement for local councils in England. Under the proposals, local authorities would receive £70.4 billion in 2008-09, £73.5 billion in 2009-10, and £76.7 billion in 2010-11 – increases of 4.0 per cent, 4.4 per cent, and 4.3 per cent respectively.
Source: House of Commons Hansard, Debate 6 December 2007, columns 981-995, TSO (0870 600 5522)
Links: Hansard | DCLG press release | Guide | LGA press release | NLGN press release | Help the Aged press release | Guardian report | BBC report | Telegraph report | FT report | Community Care report
Date: 2007-Dec
A think-tank report said that although many areas of the country had benefited from an influx of migrant workers, the existing funding mechanism for local authorities could be reformed to help communities cope. It advocated rewarding areas that increased levels of employment by devolving a section of the starting rate of income tax directly to councils. This 'taxes as grants' system would allow councils a better automatic fiscal incentive to help local services adapt to local population shifts.
Source: Matthew Clifton, Managing New Migration: A local approach to a global phenomenon, New Local Government Network (020 7357 0051)
Links: NLGN press release
Date: 2007-Dec
An article examined the recommendations and decisions in respect of local council taxation made in England, Scotland, Wales, and Northern Ireland, following recent reviews. It examined how Northern Ireland had emerged with the greatest divergence in local taxation policy, and the relevance of devolution and other political factors in determining the policy outcomes in each country.
Source: Derek Birrell, 'Divergence in policy between Great Britain and Northern Ireland: the case of local taxation', Public Money and Management, Volume 27 Issue 5
Links: Abstract
Date: 2007-Nov
The government published its 2007 Pre-Budget Report and Comprehensive Spending Review. It said that central funding for local authorities in England would increase by 1 per cent per year in real terms over the period between 2007-08 and 2010-11. The settlement assumed that local councils would be able to find an additional £4.9 billion in efficiency savings by 2010-11: the government also published a report outlining the ways in which this could be achieved.
Source: Meeting the Aspirations of the British People: 2007 Pre-Budget Report and Comprehensive Spending Review, Cm 7227, HM Treasury, TSO (0870 600 5522) | Delivering Value for Money in Local Government: Meeting the challenge of CSR07, Department for Communities and Local Government
Links: CSR report | Summary | VFM report | Hansard | HMT press releases | DCLG press release | LGA press release | CIPFA press release | LGIU press release | Guardian report | Inside Housing report | Community Care report
Date: 2007-Oct
The government published a White Paper in which it announced the introduction of a new power for local authorities in England to raise and retain local supplements on the national business rate, in order to fund projects that would promote economic development.
Source: Business Rate Supplements: A White Paper, Cm 7230, HM Treasury, TSO (0870 600 5522)
Links: White Paper | HMT press release | BCC press release
Date: 2007-Oct
The government responded to a report by a committee of MPs on council tax benefit. It said that council tax benefit made an important contribution to the financial security of over 5 million households on low incomes. Its aim was to deliver the benefit as accessibly, simply, and securely as possible, and it continued to do research to look at how this might be achieved.
Source: Local Government Finance: Council Tax Benefit – Government Response to the Committee's Eighth Report, First Special Report (Session 2006-07), HC 1037, House of Commons Communities and Local Government Select Committee, TSO (0870 600 5522)
Links: Response | MPs report | UNISON press release
Date: 2007-Oct
A report examined possible changes to council tax benefit, designed to make it fairer and to increase the rate of take-up.
Source: A Benefit to Eight Million Households: What CTB does and how to improve it, Local Government Association (020 7664 3000)
Links: Report | LGA press release
Date: 2007-Sep
A briefing paper provided an overview of the existing system of local government finance in the United Kingdom. It outlined the structure of local government, summarized the composition of local authority spending, and described in detail how the spending was financed. It concluded with a brief discussion of options for reform.
Source: Stuart Adam, Carl Emmerson and Anoushka Kenley, A Survey of UK Local Government Finance, Briefing Note 74, Institute for Fiscal Studies (web publication only)
Links: Briefing Note
Date: 2007-Aug
A think-tank report examined the potential for a supplementary business rate to help finance urban infrastructure spending.
Source: Ben Harrison and Adam Marshall, City Solutions: Financing local growth – Towards a supplementary business rate?, Institute for Public Policy Research (020 7470 6100)
Links: Report | IPPR press release | Guardian report
Date: 2007-Aug
A report by a committee of MPs urged the government to allow local councils to levy a supplementary business rate.
Source: Local Government Finance: Supplementary Business Rate, Seventh Report (Session 2006-07), HC 719, House of Commons Communities and Local Government Select Committee, TSO (0870 600 5522)
Links: Report | LGA press release | NLGN press release | FSB press release | Guardian report
Date: 2007-Aug
A report by a committee of MPs said that perceptions of the legitimacy of council tax were more likely to be undermined if there were not an effective mechanism in place to alleviate the financial burden it placed on low-income households. It called on the government to take action as matter of urgency to address the restrictive nature of the rules governing council tax benefit, as well as to increase take-up among all eligible low-income households.
Source: Local Government Finance: Council Tax Benefit, Eighth Report (Session 2006-07), HC 718, House of Commons Communities and Local Government Select Committee, TSO (0870 600 5522)
Links: Report | LGA press release | LGIU press release | Liberal Democrats press release | BBC report
Date: 2007-Aug
The government announced ten pilot projects under which people would be given a chance at local level to examine and decide on how public budgets of up to £20 million were spent. The objective was for every neighbourhood to have control of a 'community kitty' within five years.
Source: Speech by Hazel Blears MP (Secretary of State for Communities and Local Government), 5 July 2007
Links: Text of speech | DCLG press release | LGIU press release | Guardian report
Date: 2007-Jul
The government began consultation on the technical formula for calculating the formula grant to local authorities in England (revenue support grant, redistributed national non-domestic rates and, where appropriate, police grant).
Source: Local Government Finance Formula Grant Distribution: Consultation Paper, Department for Communities and Local Government (0870 1226 236)
Links: Consultation document | DCLG press release
Date: 2007-Jul
Capital expenditure by local authorities in England in 2006-07 was little changed from 2005-06, according to provisional figures: but it was forecast to rise to £18.8 billion in 2007-08, a year-on-year increase of 13 per cent.
Source: Local Authority Capital Expenditure and Receipts: England - 2006/07 Provisional Outturn and 2007/08 Forecast, Department for Communities and Local Government (0870 1226 236)
Links: Report
Date: 2007-Jun
The government published budget estimates of local authority revenue expenditure and financing for the financial year 2007-08.
Source: Local Authority Revenue Expenditure and Financing England: 2007-08 Budget, Department for Communities and Local Government (0870 1226 236)
Links: Report
Date: 2007-Jun
The report was published of a government-commissioned review of local government funding. It recommended a new top rate council tax band for the country's most expensive properties, along with a new bottom rate band to cut bills for those in the least expensive homes. The savings limit for pensioners should be higher, and council tax benefit should be paid as an automatic rebate. Local councils would be granted greater powers to raise revenue, including the ability to charge a supplementary business rate of up to 4p in the pound to support economic expansion. Future governments could consider more radical reform options, such as local income tax or re-localization of the business rate: but these reforms might require greater public support and understanding.
Source: Place-shaping: A shared ambition for the future of local government, Lyons Inquiry into Local Government, TSO (0870 600 5522)
Links: Report | Summary | Lyons press release | DCLG press release | LGA press release | NLGN press release | LGIU press release | London Councils press release | RTPI press release | CIH press release | CIPFA press release | IPPR press release | IPPR briefing | CRC press release | Age Concern press release | Help the Aged press release | Guardian report | BBC report | FT report
Date: 2007-Mar
An all-party parliamentary group said that central government regeneration initiatives would fail to provide enough cash to meet vital infrastructure needs. It called for more radical action to allow local authorities to fund infrastructure schemes.
Source: Loosening the Leash: How local government can deliver infrastructure with private sector money, All Party Urban Development Group (020 7470 6119)
Links: Report | APUDG press release | LGA press release | Guardian report
Date: 2007-Feb
A think-tank report said that the cost of the Greater London Authority and Mayor of London, at over £300 per year for the average household in the capital, was too high. It was time to bring the costs under control by implementing rigorous budgetary controls, eliminating waste and pointless programmes, and by promoting greater efficiency in services.
Source: Victoria Borwick, The Cost of the London Mayor, Centre for Policy Studies (020 7222 4488)
Links: Report
Date: 2007-Feb
The government confirmed (following consultation) that the guaranteed minimum grant increase for all local authorities in England for 2007-08 would be 2.7 per cent (3.6 per cent for police authorities). Total formula grant for 2007-08 would be 3.7 per cent higher than the previous year. Specific grants, such as the dedicated schools grant, would bring the total increase in funding for local authorities to 4.9 per cent in 2007-08.
Source: House of Commons Hansard, Written Ministerial Statement 18 January 2007, columns 39-40WS, TSO (0870 600 5522) | The Local Government Finance Report (England) 2007/2008, Cm 231, Department for Communities and Local Government, TSO (0870 600 5522)
Links: Hansard | DCLG press release | Report
Date: 2007-Jan