Local Government Finances - Motion to Take Note

Part of the debate – in the House of Lords am 2:15 pm ar 21 Mawrth 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 2:15, 21 Mawrth 2024

No, I do not. We will work with local authorities on that issue.

The Government have invested £5.5 billion on highways maintenance since 2021. In 2023, we provided an additional £200 million to fix the equivalent of 4 million potholes. In October last year, the Government announced £8.3 billion of new funding, over a 10-year period, for local road resurfacing. We are putting in extra money and not asking councils to find it in their base budgets.

My noble friend Lady Eaton and the noble Lord, Lord Shipley, brought up the Office for Local Government. Oflog aims to provide authoritative and accessible data and analysis about the performance of local government, which is important, and to support its improvement. It is still in its infancy, but its three aims are: to inform, by improving access to data; to support, by facilitating sector-led improvement; and to seek any potential failures that it can find, getting in early to support our local authorities.

The noble Baroness, Lady Hamwee, brought up the issue of local democracy and devolution. If anybody sat through the levelling-up Bill in this Chamber, they will know that devolution is at the heart of our plans to increase economic growth and level up the whole country. We remain committed to seeing more empowered and accountable local leaders to do this, who can pave the way for that growth and innovate because they know the challenges and what is best needed for their areas.

There was quite a lot of talk on planning authorities and whether local authorities should have the ability to set their own planning fees. This came from my noble friend Lady Eaton, who has so many years in local government—probably more than many of us who have a lot there. I thank her for her speech and her insight. We increased the fees considerably last year, by 38% for major applications and 25% for other applications. We have done another couple of things to help the planning sector. We have what we are calling a planning super-squad: this is an important team of senior planners who can go into a local authority that has a large or complex application and help it with the capacity and delivery issues. We hope that this will get some of our bigger planning applications away much quicker. We have invested £13.5 million in that. We have also put £29 million in a planning skills delivery fund. That is to help local planning authorities with their backlogs. We are doing a lot but, as we said on the LURB as it went through, we will not look at local authorities setting their own planning fees because we feel it might destabilise things, by having different areas with different fees across the country.

My noble friend Lady Eaton also brought up the right-to-buy receipts. At the Budget earlier this year, the Government announced increases in flexibilities available for local authorities to fund a higher percentage of the cost of replacement of affordable homes. That is taking right-to-buy sales from 40% to 50%. We hope that this will allow local authorities greater resources to allocate towards what we know is important housebuilding in the social rented sector.

The noble Lord, Lord Shipley, brought up business rates. We have ensured that all current enhanced business rate retention areas will continue for the next year. During this time, the Government will continue to review the role of such arrangements as a source of income for areas, and their impact on local economic growth and as part of the deeper devolution commitments as set out in the levelling-up White Paper.

The noble Lord also brought up council reserves. The Government consider reserves to be an important part of the resources available to local councils. Interestingly, reserves remain significantly higher since the pandemic, having risen £31.6 billion over that time, but we expect councils to use their reserves appropriately when there are pressures on them.

I am conscious of the time, so I will move to something that most noble Lords brought up, which was quite an interesting part of the debate: culture and the arts. I will ask my noble friend Lord Parkinson, the Minister for the DCMS, to read Hansard—oh, he is here; that is good timing. The debate was wider than just local government, and is something to do with the responsibilities between local and central government, so we will talk about it.

There were some interesting issues. The majority of funding that comes to local government is not ring-fenced in recognition, quite rightly, that local authorities are best placed to make local decisions. I totally agree with all the speakers that arts, culture, sport and heritage make our communities unique and vibrant. They also drive economic growth, give jobs and improve well-being. We encourage councils to reflect on the important role that these sectors play.

We have provided support for the cultural sector across the country. At the Spring Budget in 2024, the Chancellor confirmed the allocation of £100 million for local cultural projects, recognising the importance of pride for the place. This included a number of nationally significant cultural projects such as the British Library North project in Leeds and the National Railway Museum in York. Smaller amounts were also given to places that did not get levelling-up programmes, including Maldon, Erewash and North Northamptonshire, which have all been awarded £5 million of capital funding. I was also interested to hear that a new studio was announced in the north-east last week. The new north-east mayoral combined authority intends to use £25 million of flexible funding to help that scheme.

I am out of time so I close by saying that we recognise the scale of the financial pressures caused by inflation and the wider economic circumstances that have put local authorities across the country under acute strain. To address this, we have listened to the public and engaged with local authorities; this is why we have provided the substantial increase in support above inflation that this funding settlement provides. Once again, I thank the noble Lord, Lord Shipley, for bringing forward this debate and all noble Lords for their contributions. I look forward to continuing discussions with them.