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Council Tax
14 November 2024
Lead MP
Matthew Pennycook
Debate Type
Ministerial Statement
Tags
Social CareEconomyTaxation
Other Contributors: 20
At a Glance
Matthew Pennycook raised concerns about council tax in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
Since the 2012-13 financial year, local authorities have been required to determine whether their council tax plans are excessive based on thresholds set by the Secretary of State. Since 2016-17, these thresholds include a social care precept allowing higher limits for those with adult social care responsibilities. The Government expect current threshold levels to remain unchanged and await further details in the local government finance settlement later this year. The Budget announced £4 billion in new funding for local government, including an additional £1.3 billion grant, widely welcomed by the sector.
David Simmonds
Con
Ruislip, Northwood and Pinner
Question
Council tax funds £20.5 billion of social care expenditure in England; the Government's announcement of a 5% limit constrains local authorities when it comes to fundraising. While the Chancellor’s Budget has opened up a £2.4 billion black hole in council finances, the Minister must clarify whether this will be addressed through increased business rates or significant cuts to other services.
Minister reply
The Government are committed to a fair funding settlement for local government and will set out further details in the upcoming local government finance settlement. The £2.4 billion figure does not account for additional revenue from business rates and new houses, which together with the core spending increase bring the total real-terms increase in core spending to around 3.2%.
Florence Eshalomi
Lab Co-op
Vauxhall and Camberwell Green
Question
Local authorities are facing a funding crisis that has forced them to make difficult decisions, with major in-year cost pressures from things such as temporary accommodation and special educational needs and disabilities provision. The Minister agrees we need to accelerate the house building plan so local residents do not see an increase in their council tax bills.
Minister reply
The headroom provided through the Budget—more than £4 billion in new local government funding—is essential for turning around a system on its knees after 14 years of neglect. The increased social and affordable housing supply is crucial.
Lee Dillon
Lib Dem
Newbury
Question
The burden on councils has increased to such an extent that they are forced to make impossible choices, leading to cuts in services like libraries, bus routes, and road repairs. Despite the Budget announcement, councils face a £6.9 billion shortfall due to inflation, wage demands, and service pressure.
Minister reply
The Government recognise the pressures on local authorities but are committed to fair funding through multi-year settlements, removing ringfences, and protecting vulnerable households with schemes like the single-person discount.
Clive Betts
Lab
Sheffield South East
Question
Opposition Members cannot stand there and talk about cuts and shortfalls with a straight face when responsibility lies elsewhere.
Minister reply
The Government are determined to rebuild local government from the ground up through multi-year funding settlements, removing ringfences, and committing to fair funding.
John Glen
Con
Salisbury
Question
Will the Minister rule out additional council tax bands being among any changes that the Government make?
Minister reply
We are committed to maintaining current thresholds and will set out further details about the local government finance settlement at the appropriate point next year.
Karl Turner
Lab
Kingston upon Hull East
Question
Areas like Hull city council were savaged by the previous Government when it came to funding—absolutely savaged, to the point where they were almost on their knees. Will my hon. Friend the Minister tell the House what the Government are doing for areas of high deprivation like Hull?
Minister reply
My hon. Friend is absolutely right. The damage done to local government over the 14 years in which the Conservatives were in office is profound. We have inherited, as I said, a system on the verge of collapse. We are absolutely committed, as part of rebuilding that system from the ground up, to a fair funding settlement. As I say, the Minister for Local Government will announce more details in the upcoming local government finance settlement in the new year.
Bob Blackman
Con
Harrow East
Question
Local authorities across the country will welcome multi-year settlements, so they can plan for the future. However, does the Minister have any plans whatever for a revaluation of properties, given that properties were originally valued back in 1992, when council tax began?
Minister reply
The hon. Gentleman tempts me to discuss the local government finance settlement ahead of it being formally presented to the House. I am afraid I cannot do that, but the Government have heard his point, and I will ensure that it is passed on to the Local Government Minister.
Tristan Osborne
Lab
Chatham and Aylesford
Question
As a councillor, I saw 14 years of austerity and cuts to local government, and a 93% cut equivalent for my council in Medway. The opposition, the Medway Conservative group, recently stated that it would not only scrap the recent council tax cap, but introduce a local income tax on residents. Does the Minister agree that there needs to be consistency on this issue, whereas the Opposition’s approach is to say, in one case, “Scrap the cap,” and in another, “Keep it”?
Minister reply
My hon. Friend is absolutely right and we still have not had an answer: we do not know the Opposition’s position on thresholds. [Interruption.] We are in government, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) chunters from a sedentary position, and we have confirmed that when it comes to thresholds, we intend to maintain the position as it was under the previous Government, and as baked into the Office for Budget Responsibility forecast for the spending period. The Opposition really do have to answer this question: are they saying that the thresholds should be removed or increased, or are they saying that they should be reduced and core services cut?
Harriett Baldwin
Con
West Worcestershire
Question
The Chancellor and the International Monetary Fund are known to favour ending council tax and replacing it with a wider property tax. The Welsh Labour Government tried to revalue all the properties in Wales for council tax purposes. Can the Government rule out doing either of those things?
Minister reply
I am not going to get into speculating about more fundamental reform of the council tax system. As I have in a number of my responses to this urgent question, the Government will set out their position on the thresholds, and on other matters in respect of the local government finance settlement, at the appropriate point early in the new year.
Rachael Maskell
Lab Co-op
York Central
Question
York is the lowest-funded unitary authority in the country, but has one of the highest costs of living. That puts real pressure on it. We are also among the poorest-funded for health, fire and police services. When the Minister looks at the funding formula for local government, will he look at the presumptions made, to ensure more equity in the way it is put together?
Minister reply
As I have said repeatedly— I commit to it again—we are determined to ensure that there is a fair funding settlement for local government, and as I have said, more details will be forthcoming in the settlement early next year.
James Wild
Con
North West Norfolk
Question
Labour used to say that it would freeze council tax. Can the Minister now confirm that its policy is actually to put council tax up because of the flawed, broken promise on national insurance?
Minister reply
No, that is not the case. We are maintaining the policy of the previous Government, which, as per the OBR forecast, estimated that £1.8 billion will be raised through council tax. The position of the Government is that it will maintain the thresholds. If the hon. Gentleman thinks differently, he should tell House what his position is on thresholds: should they be reduced or increased?
Jayne Kirkham
Lab Co-op
Truro and Falmouth
Question
I am pleased about the support for first and second-tier councils and the commitment to fair funding, which will make a real difference in, for instance, Cornwall. However, in unitary authorities such as ours, where a great many services have been shared, larger town councils have had to step up and take the strain, but have not had the grants and other measures that have been available to those first and second-tier councils. Could the appropriate Minister meet me to discuss the position of larger town councils in Cornwall?
Minister reply
I am more than happy to commit the Local Government Minister to a meeting with my hon. Friend.
Richard Holden
Con
Basildon and Billericay
Question
During Prime Minister’s questions yesterday, the Government accepted that they were giving councils a maximum of £600 million, but the Local Government Association has said that there is £2.4 billion worth of pressure. Does the Minister accept that councils will have to increase their tax by about £1.8 billion to fill the gap between what the Government are offering them and what they need to provide local services?
Minister reply
As I have made clear, we do not recognise the £2.4 billion figure. It fails to take into account increases that I have already mentioned, such as the £300 million increase in business rates income and the £300 million increase in income from new, additional houses. The hon. Gentleman is absolutely right that we expect council tax to raise £1.8 billion in 2025-26, but that is in line with the previous Government’s spending plans and baked into the OBR forecast as of March 2024.
Darren Paffey
Lab
Southampton Itchen
Question
As a former deputy council leader, I am somewhat amazed by the collective amnesia of Conservative Members. The hon. Member for Ruislip, Northwood and Pinner (David Simmonds) spoke of what “constrains” local government spending power. Does my hon. Friend agree that it is 60% cuts, such as those that Southampton city council has suffered for 14 years, that have really reduced that spending power, and does he agree that rather than faux outrage, what we need is an apology?
Minister reply
I absolutely agree with my hon. Friend. We deserve an apology, but I doubt that we will get one. Before 2010, it was vanishingly rare for councils to fall into serious financial difficulty. Since then, nine councils have been affected in just 14 years. There is a pattern here. For too long, the Conservative Government not only failed to carry out their duty to local government, but hollowed out frontline services and crashed the economy. We are turning that around with the support that we are providing to local government in the Budget. We will set out more details in the local government settlement early next year, as I have mentioned.
Jim Shannon
DUP
Strangford
Question
As the Minister will know, although we do not have council tax per se in Northern Ireland, the pressures on our family finances are on a par with those on the UK mainland. The Government need to be clear about just how much further the finances of average families will be stretched, because this is a very worrying trend. What extra help can families, especially disabled families, expect to receive this year?
Minister reply
I thank the hon. Gentleman for his question, which relates to an earlier one. I think that, in the urgent question, the Opposition failed to account for the various other sources of support that we are providing for families. We are continuing the household support fund—that is £1 billion. There is a £1 billion uplift for special educational needs. There is UK shared prosperity funding of £900 million—the list goes on, but if the hon. Gentleman wishes to discuss the specific conditions in Northern Ireland further, I am more than happy to pass on that request to the Local Government Minister.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
Question
I refer the House to my entry in the Register of Members’ Financial Interests: I am a vice-president of the Local Government Association; Opposition Front Benchers might want to reflect on that. My hon. Friend mentioned front; I could talk about the Opposition’s brass neck in talking about concerns about the pressures that local councils face. Does he agree that 14 years of Conservative austerity, initially with the Liberal Democrats, devastated the ability of many councils, including Luton council, to provide much- needed services to families in our constituencies?
Minister reply
I have been a local councillor, as have many Members of this House. The hon. Member for Ruislip, Northwood and Pinner (David Simmonds) has been a council leader, so he will know what has happened to the system over the past 14 years. The Opposition continue to claim that there is a multibillion-pound black hole in local council budgets. When asked how they would fix it, however, they said, “It’s not for us to do; we’re in opposition. It’s for the Government.” It is a classic policy of having no plan to fix the mess. They have provided no clarity on their position on thresholds, and failed to take responsibility for what they did over 14 years in government.
Daniel Francis
Lab
Bexleyheath and Crayford
Question
My Conservative-controlled council in Bexley had to apply for a capitalisation order three years ago, made 15% of staff redundant, and has been overspending its budget every month for over two years. The LGA Conservative group executive published a manifesto asking the Government to remove caps on council tax. Does my hon. Friend agree that it is rank hypocrisy for the Conservative party to complain about black holes in council finances?
Minister reply
I absolutely do, and the Government are determined to extract from the Opposition some clarity on their position regarding thresholds. Do they agree with the LGA Conservative group, which has called for removing caps on council tax? We still need more information from them.
Jim Dickson
Lab
Dartford
Question
After 30 years as a councillor, I have not met any councillor who believes that local government finance is in its worst state for decades. The latest LGA figures indicate that Labour authorities have £276 lower council tax than Conservative ones. Does the Minister agree that this shows Labour councils provide better value for money?
Minister reply
My hon. Friend is absolutely right. Labour councils charge less on average than Tory councils, and those with the lowest rates of council tax are all Labour. Council tax bills in Labour councils are on average £345 lower than in Tory councils. People should vote Labour to ensure their council tax remains low.
Emily Darlington
Lab
Milton Keynes Central
Question
As a former local government leader, I want to thank leaders like Pete Marland at Milton Keynes city council for keeping services during 14 years of austerity. Milton Keynes has kept weekly bin collections, children’s centres open, and reduced rough sleeping while keeping council tax lower than in neighbouring Tory authorities. Does the Minister agree that instead of using local authority leaders for political points, the Conservative party should thank them and apologise for 14 years of austerity?
Minister reply
My hon. Friend makes a good point. We extend our appreciation to all local government leaders across parties for keeping services despite pressures over the past 14 years when the previous Government ran down local government. We want to consult them on how we rebuild the system and would be happy to have a mature, cross-party conversation about fixing this mess.
Shadow Comment
David Simmonds
Shadow Comment
Council tax funds about £20.5 billion of social care expenditure in England, which is 61% of all council funding. The Government's announcement of a 5% limit constrains local authorities when it comes to fundraising. While the Chancellor’s Budget has opened up a £2.4 billion black hole in council finances, the Minister must clarify whether this will be addressed through increased business rates or significant cuts to other services.
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