CIPFA responds to the Provisional Local Government Finance Settlement 2018/19


“Today’s announcement appears to echo sentiments of the chancellor in last month’s Budget, that by allowing councils greater financial freedoms, they can begin rebalancing their funding uncertainty after years of budget cuts. 

“The increase in business rates retention from 50% to 75% will be welcomed by councils that already have a strong business base, but it will mark a challenge for higher need councils, especially those with lower economic growth potential. 

“The sharp change in direction over recent years from council tax freezes to encouraging annual increases does help to build upon the renewed localism agenda, if only to plug the funding gap created by the reduction in grants. However, there are concerns that this is not a fair tax for those who are paying, and it may not raise income where it is most needed. 

“CIPFA, the Chartered Institute of Public Finance and Accountancy, welcomes the consultation on fairer funding as this is essential to ensure the financial stability for the sector. 

“Some districts will be pleased that there is no change in the New Homes Bonus (NHB). The stability will provide security for those authorities who have based their growth strategies on the NHB, but it will not be welcomed by councils in areas of less growth and who do not currently qualify for it.

“Finally, a reminder that the long-awaited Green Paper on social care which will appear next summer has not been accompanied with a pledge for any additional funds. Social care is in a funding crisis now. It must be moved up the government’s priority list.”