From taking your child for a Saturday morning swim at the local leisure centre to jumping on the bus to catch the latest box office hit, we all use our public services differently but we depend on them to go about our daily lives.
I recognise that local authorities up and down the country are having to make difficult choices about how best to balance their budgets, particularly with increasing pressure in areas like adults’ and children’s social care.
We are continuing to listen carefully to councils’ concerns and are taking action to protect services.
This year will be an important one for local government. Councils will receive an extra £1billion in 2019/2020, including funds committed for social care to help the most vulnerable in our society.
It also marks the end of a four-year deal - which saw local authorities receiving £200billion to 2020 – and we are looking ahead to a new Spending Review and a fresh opportunity to look in the round at how we are going to fund local government in the future.
We’re clear that we want to build a sustainable long-term future for councils, so we need to ensure that the way we decide how to assign funding is fair and in line with the needs of communities. People must have access to the day-to-day services they need, whether it’s regular rubbish collection or being able to visit their library and health centre.
We’re already taking a number of steps to begin reassessing local government’s funding.
High streets are the backbone of our economy and a crucial part of our local communities. We know it is local people who are best placed to develop long term solutions to the problems their high streets face but it is important that the Government equips them with the tools to do this.
In response to recommendations from an expert panel led by Sir John Timpson the Government has launched a £675million Future High Streets Fund to help improve infrastructure and access to high streets, put historic buildings back to use and make town centres fit for the future. Local councils will take the lead in bidding for this funding and driving the transformation in their communities. This is a huge vote of confidence by central government in their abilities.
This year sees the outcome of our Fair Funding Review, which is our plan to modernise the way we give funding to local authorities and how their need is assessed. The way that funding is distributed hasn’t been looked at in over ten years and we have concerns that the current way of distributing funding is out of date, overly complex and doesn’t recognise the current reality of demand on the ground for councils.
Another part of creating a sustainable future is to give local authorities more power to raise and retain money locally so more money is available to spend on vital services. Last month, we announced fifteen new pilot areas across the country which will be able keep 75% of their business rates growth, ahead of our plans to roll this out across the country from 2020. This latest pilot is an example of how we plan to help councils keep more of the business rates they collect.
Another important challenge for local authorities which we’re working to address is the pressure on housing. We want to be building 300,000 net additional houses a year by the middle of the next decade. This would be the biggest annual increase in housing supply since 1970. Local authorities have the land, the planning responsibilities and importantly the knowledge of the needs of their local communities to deliver a significant number of new homes. They want to be able to borrow more money and they also want greater flexibility to use this money.
In her Autumn Conference speech in Birmingham last year the Prime Minister announced that we were lifting the borrowing cap on councils all together. This removes the single biggest barrier to councils building new homes and the council leaders I’ve spoken to have been hugely positive about the opportunities this change will bring in a new age for the delivery of social housing. We’ve estimated councils will be able to build up to about 10,000 homes per year – more than double their current delivery.
This year is our chance to look again at how we fund local government. We will be working closely with local authorities and partners to determine that the right funding is in place from 2021 for a brighter future for councils and the communities they serve.
Rishi Sunak is the Conservative MP for Richmond and a local government minister
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