Local Government Funding
While the chancellor has announced new, further departmental savings for departments, local government has been largely protected. The chancellor has said this is to encourage local governments to take up the national government’s offer of a council tax freeze which is again available in the coming financial year.
There will be a new national council tax discount of 50% for family annexes from April 2014. This will support extended families living together, for example with children saving for a new home or elderly parents (who would not otherwise qualify for the existing exemptions). It will be fully funded by the national government.
New Homes Bonus
Following the consultation carried out over the summer and in light of some powerful arguments made by colleagues in local government, the national government has confirmed that it will not pursue the proposal to top slice the NHB receipts for Local Enterprise Partnerships for councils outside London. The £2 billion Local Growth Fund will be made up from other decentralised budgets.
Cutting business rates and helping local shops
A series of measures have been announced to continue to prioritise small businesses and local growth. This includes:
- The planned 3.2% RPI increase for 2014-15 will be reduced to 2%. There will be a £1,000 discount for all retail, pubs, cafes (excluding banks and betting offices) with rateable values below £50,000 for 2 years.
- The doubling of Small Business Rate Relief will continue for a further year. Ratepayers will continue to keep their Small Business Rate Relief entitlement for a year where they take on a second property,
- New occupiers of former retail premises which have been unoccupied for a year will receive a 50% discount for 18 months.
There will be a consultation on reforms to the business rates appeals process and a commitment to clear 95% of the September 2013 backlog of appeals before July 2015.
It has been reported that local governments will be fully refunded for the loss in revenue resulting from these changes.
Increasing funding for housing
A number of new measures to support house building were announced. This includes a £1 billion, six-year investment programme to fund infrastructure to unlock new locally-led, large housing sites. This will support the delivery of around 250,000 houses. More is being done to support Right to Buy; introducing agents help buyers complete their purchase, and a £100 million fund to improve applicants’ access to mortgage finance. There is also the intention to consult on a Right to Move for social tenants wanting to take up work or training in another area.
Announcement referred to a review into the role of local governments in supporting overall housing supply. Accompanying this, the national government has announced a limited increase in Housing Revenue Account borrowing.
The additional £300 million will be allocated via a competitive bidding process with support given to local governments which can produce good business cases, agreed by their local enterprise partnership, that bring in local authority owned land and other forms of cross-subsidy such as sales of high value vacant property, raising funds to provide more overall homes.
Delivering savings from cutting fraud
Alongside the roll of the Single Fraud Investigation Service, DCLG and DWP are investing in local government’s capacity to tackle non-welfare fraud. This package of support will include extra funding over 2014-15 and 2015-16 which will be able to support new fraud investigator posts in councils focussed on tackling corporate fraud.