The District Councils’ Network has responded to today’s Budget, delivered by Chancellor Rachel Reeves this afternoon.
The Budget introduces mansion and tourist taxes, and allocates extra money for the planning system.
It also suggests that the Government has set targets for savings from local government reorganisation and for the number of councillors to be axed.
Local government finance
Cllr Jeremy Newmark, finance spokesperson for the District Councils’ Network, said:
“Local government’s troubled financial outlook remains fundamentally unchanged by today’s Budget. Many district councils will need to cut back the most visible and widely-used local services, hitting our residents’ wellbeing and quality of life.”
Local government reorganisation
The Budget document claims over £250m can be saved by 2030-31 by “cutting the cost of politics”. The figure appears to refer both to the reorganisation of local government and abolition of Police and Crime Commissioners, but no separate figure is given for either element. The document says reorganisation has the “potential to reduce the number of councillors in local authorities by around 5,000”.
Cllr Newmark said: “The Government committed to reorganising local government without undertaking any evaluation of the potential for savings. It should now publish in full all the information it holds, including on the inevitable transitional costs of the reforms.
“There has been no previous indication of a target for reducting the number of councillors. If there is now a target, the figure should be widely debated, with any projected savings set against the negative impact to local communities of the loss of democratic representation.”
Tourist levy
On the introduction of a power for strategic authority mayors to be able to charge a levy on overnight visitors to an area, Cllr Newmark added:
“We welcome and campaigned for local leaders being able to choose to levy tourist taxes. This must be done in a way which reflects the highly localised costs which tourism brings.
“The costs of tourism are often borne in individual towns or along small stretches of coastline, rather than extending across a wider region. It’s therefore essential the leaders of principal authorities including district councils play a key role in determining how the proceeds of the tourist levy are spent.”
High Value Council Tax Surcharge
The Government announced the introduction on new surcharge on council tax on houses worth £2m or more from 2028-29. “Local authorities will collect this revenue on behalf of central government,” the document says, although it adds: “Revenue will be used to support funding for local government services.”
In response, Cllr Newmark added:
“It’s perplexing that a Treasury committed to devolution is seeking to retain the mansion tax proceeds centrally, rather than ensuring that the money raised locally is spent locally, at a time council services are crying out for cash.
“Council tax will still be based on 1991 home valuations which don’t always reflect householders’ real ability to pay. Many district areas have few if any homes which fall into the new higher bands. A more fundamental reform of council tax is required to ensure fairness to bill payers and service users everywhere.”
Extra planners
Cllr Newmark added:
“Planning has becoming increasingly underfunded as councils have been disproportionately hit with austerity over the past 15 years. We therefore welcome the much-needed additional funding for extra planners, even if the return on the investment won’t be apparent for several years.
“However, the scale of the planning reforms announced by the Government is adding to planners’ workload and risks diminishing their ability to ensure developments meet local needs. This extra funding should be seen in that context.”
