Second Report - Local authority financial sustainability and the section 114 regime
Select Committee
Housing, Communities and Local Government Committee
HC 33
19 July 2021
Government response
Local authority financial sustainability and the Section 114 regime: Government response to the Select Committee report · published 21 Oct 2021
Recommendations & Conclusions
5 results
2
Conclusion
Rejected
Para 24
We agree with the principle of incentivising councils to grow business rates in their area,...
Conclusion
We agree with the principle of incentivising councils to grow business rates in their area, as a means of making them less reliant on central funding, but we are concerned about the impact on councils that, through no fault of …
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Government Response Summary
The government stated it would not proceed with the implementation of the Fair Funding Review and business rates reset in 2021/22. It confirmed that decisions on the future direction of local government finance reform will be taken at the ongoing Spending Review.
Ministry of Housing, Communities and Local Government
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4
Recommendation
Rejected
We recommend that the Government implement the Fair Funding Review and business rates reset as...
Recommendation
We recommend that the Government implement the Fair Funding Review and business rates reset as soon as possible, as the quickest way of partly restoring the link between funding and need. The Government should also allow councils to retain 75% …
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Government Response Summary
The government explicitly rejected the immediate implementation of the Fair Funding Review and 75% Business Rates Retention, stating that decisions on the way forward will be taken at the ongoing Spending Review.
Ministry of Housing, Communities and Local Government
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5
Conclusion
Rejected
Para 31
We are pleased that the allocation of the £300 million grant for social care mitigates...
Conclusion
We are pleased that the allocation of the £300 million grant for social care mitigates the distributional impact of the council tax rises, but we do not think the fairness of the funding model should be reliant on one-off, short-term …
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Government Response Summary
The government rejects the implied recommendation for council tax reform and revaluation, stating it has no plans for fundamental change. It argues that a revaluation would be expensive, lead to higher bills for many households, potentially penalise those on fixed incomes, and not address disparities in council tax base strength.
Ministry of Housing, Communities and Local Government
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6
Recommendation
Rejected
Para 32
The Government should reform council tax by undertaking a revaluation of properties and introducing additional...
Recommendation
The Government should reform council tax by undertaking a revaluation of properties and introducing additional council tax bands, in line with the recommendations of our predecessor Committee. In the longer term, the Government should consider options for wider reform of …
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Government Response Summary
The government rejects the recommendation, stating it has no plans to replace or fundamentally reform council tax. It argues that a revaluation would be expensive, lead to bill increases for many households, potentially penalise people on fixed incomes, and not address disparities in council tax base strength.
Ministry of Housing, Communities and Local Government
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19
Conclusion
Rejected
Para 89
The absence of section 114 notices before 2018 is adduced as evidence that the regime...
Conclusion
The absence of section 114 notices before 2018 is adduced as evidence that the regime has been broadly successful. The consequences for a council of issuing a notice are serious, however, and we are concerned that, rather than concentrating minds, …
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Government Response Summary
The government defends Section 114 notices as an important and effective part of the finance system, stating they operate within a wider system of checks and balances that should lead to earlier action, thus not committing to an intermediary "yellow card" measure.
Ministry of Housing, Communities and Local Government
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