Council Tax and Revenue Support Grant

Opened the debate

Dorset residents pay over two and a half times more council tax than those in London. A third of the population is over 65, and services are largely funded by council tax with only minimal revenue support grant received compared to urban areas like Wandsworth (£654,000 vs £24 million). Dorset Council receives just 0.2% of total income from RSG, making it difficult for the elderly population and children's social care needs.

Government Response

It is a pleasure to serve under the chairmanship of Sir Mark. My hon. Friend the Member for West Dorset (Chris Loder) has outlined important points affecting his constituency and the unitary authority, emphasizing the importance of rural Britain being heard in debates. The Revenue Support Grant (RSG) has been in place since the late 1980s but its utility and application have changed over recent years due to shifts in local government funding landscapes. The provisional local government finance settlement announced before Christmas includes a significant increase, with £60 billion-worth of taxpayer subsidy allocated for England, representing a substantial uplift across all councils. Additional clarity has been provided about what is likely to come in the financial year 2024-25, addressing long-standing requests from the sector. A one-off funding guarantee was also introduced, ensuring that individual councils could obtain some uplift prior to deciding on council tax adjustments. The minister acknowledges the significant challenges faced by children's services and adult social care but highlights increased funding through grants like the social care grant and the discharge fund. The market sustainability and improvement fund is due to come in for the next financial year, aiming to support additional social care provision within individual localities. Concerning rural funding, councils with a significant proportion of rurality have received additional funds through the rural services grant over recent years, which will continue into the coming years. The minister addresses perceived differences in how different parts of the country allocate resources and highlights that while London and other urban areas face distinct challenges, so do rural areas. The funding formulas reflect need irrespective of rurality. Acknowledging that there are different pressures and choices made in various geographical areas, the minister notes ongoing efforts to update needs assessments and funding formulas as part of a fair funding review. Despite these complexities, significant increases in funding have been provided this year through both revenue and capital grants, including allocations from the community renewal fund and the UK shared prosperity fund. The Minister concludes by emphasizing that while challenges remain, prioritizing stability for local authorities after the post-covid period is crucial. He welcomes ongoing discussions on potential improvements and changes to better support all parts of Britain.