Dan Peters 13 December 2018

Finance settlement: Government floats commercialisation crackdown

Finance settlement: Government floats commercialisation crackdown  image

Whitehall is considering a crackdown on councils that excessively borrow for commercial reasons as it continues to restrict council tax rises.

Speaking in the House of Commons today, communities secretary James Brokenshire revealed Marsham Street and the Treasury were considering whether ‘further interventions’ were required to slow the commercialisation trend.

Mr Brokenshire said his department shared the concerns of the Chartered Institute of Public Finance and Accountancy (CIPFA), which is already tightening up the prudential code.

Last week CIPFA boss Rob Whiteman said some councils were ‘spectacularly taking too much risk’ and warned that unless that stopped then the ‘whole sector may lose its freedoms under the prudential code’.

However, amid the threat of a crackdown on income generation, Mr Brokenshire said there would be no change to the 3% council tax referendum limit and no relaxation of the amount local authorities can raise through the adult social care precept.

Despite saying that residents would continue to be ‘protected’ from excessive tax rises, Mr Brokenshire confirmed that police and crime commissioners will be able to double the policing precept on bills from £12 a year to £24.

Other announcements included £16m for the rural services delivery grant in 2019/20 to reflect the ‘extra cost of providing services,’ holding the New Homes Bonus baseline at 0.4% and more than £150m to ‘directly eliminate’ the threat of negative revenue support grant.

Mr Brokenshire also announced 15 new business rate retention pilots and a ‘package of support to help councils become more efficient and get better service outcome, with a ‘continuous improvement tool’ to be launched in the spring.

He conceded it had been 'challenging for councils to drive efficiencies' and said he ‘recognised some of the pressures within social care’.

Mr Brokenshire insisted the department had been ‘listening carefully to what councils of all shapes and sizes are telling us,’ adding: ‘2019 is shaping up to be a big moment for local government, drawing together our plans for a new approach to distributing funding and increased business rates retention, as well as the upcoming Spending Review.

'There is so much excellent, inspiring work that is underway in our local communities, and it is right that we get behind it and have faith in the authorities that day in, day out, always deliver.’

Chair of London Councils, Cllr Peter John, said the finance settlement was a 'reminder that austerity is not over for local government'.

Head of local government at trade union Unison, Jon Richards, added: 'Council services are the glue that holds communities together and, as the safety net they provide for the vulnerable is squeezed, the very fabric of our society is under threat.'

Director of think-tank NLGN, Adam Lent, said: ‘This settlement largely confirms the long list of one-off and comparatively small cash boosts that fail to address the lack of financial sustainability that is now a real and present threat to local government.

‘With the NHS eating up nearly all of the Treasury’s projected rise in spending, austerity is most certainly not over for adult social care, children’s services and other core services, and this settlement does nothing to resolve that.’

For more on the provisional local government finance settlement visit The MJ (£).

Leaving nothing to chance image

Leaving nothing to chance

The ‘levelling-up’ Budget is era-defining and ambitious in scope – but we will have to wait until the summer Spending Review to understand the blueprint, says Localis’s Jonathan Werran.
SIGN UP
For your free daily news bulletin
Highways jobs

Social Worker - Family Support & Protection

Essex County Council
£30300 - £41475 per annum + plus benefits
We are one of the most effective and progressive Children and Families Service in the country. Our vision is to support families through strengths bas England, Essex, Basildon
Recuriter: Essex County Council

Senior Sustainability & Resilience Officer

Essex County Council
£30001.0 - £34017 per annum
This opportunity is to be offered on a 6-month, fixed term / secondment contract basisInterviews scheduled to be held Friday 17th April Job Purpose Es England, Essex, Chelmsford
Recuriter: Essex County Council

Senior Social Worker or Senior OT - Older Adults Team

Essex County Council
£38400 - £46475 per annum
Interviews for this role will take place via video calling using Microsoft Teams.Seeking skilled, motivated Senior Social Workers and Senior OT's who England, Essex, Colchester
Recuriter: Essex County Council

Principal Litigation Solicitor

Thanet District Council
Starting Salary £41,676 per annum, with opportunity for progression to £47,508 per annum.
We are a small and friendly team and are looking to expand with a number of senior legal roles Thanet, Kent
Recuriter: Thanet District Council

Information Governance and Equalities Manager

Thanet District Council
Starting salary of £38,916 per annum, with opportunity for progression to £44,352 per annum
We are a small and friendly team and are looking to expand with a number of senior legal roles Thanet, Kent
Recuriter: Thanet District Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue