How do the main party manifestos affect local government finance?
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As the battle for Number 10 hots up, Room151 takes a look at the manifesto commitments likely to be of most interest to section 151 officers.
Conservative Party
Business rates
In a section about creating thriving high streets, the manifesto pledges to “cut taxes for small retail businesses and for local music venues, pubs and cinemas”. It said this would cost the government £350m over the next four years.
Council tax
Local people will continue to have the final say on council tax, “being able to veto excessive rises”, the manifesto says.
Social care
The manifesto promises to “build a cross-party consensus to bring forward an answer that solves the problem, commands the widest possible support, and stands the test of time”. It said that it would consider a range of options but impose a condition that “nobody needing care should be forced to sell their home to pay for it”. It promises to maintain the 2020/21 additional allocation of £1bn for social care in every year of the Parliament.
Education
The Conservatives are promising to increase ‘alternative provision’ schools for those who have been excluded, and more school places for children with complex Special Educational Needs.
Infrastructure
The Tories are pledging £100bn in additional infrastructure spending, including £4bn in new funding for flood defences. A promise of £28.8bn investment in strategic and local roads is also included.
Housing
The document promises a social housing white paper to “support the continued supply of social homes” and promises planning changes to allow councils to discount homes by a third for local workers through planning contributions.
Devolution
An English devolution white paper would be published next year, to meet a commitment to a continued devolution of power.
IFS director Paul Johnson says: “If a single Budget had contained all these tax and spending proposals we would have been calling it modest. As a blueprint for five years in government, the lack of significant policy action is remarkable.“
Labour
Business rates
A Labour government would review the option of a land value tax on commercial landlords as an alternative to the business rates system which the manifesto says is “causing real issues for high-street retailers and others”
Local government funding
The party would establish a fund to help councils facing changing circumstances. “Where local areas experience a sharp rise in demand for services, we will make council funding more reactive,” it said.
Infrastructure
Labour is pledging to introduce a “local transformation fund” to make decisions on infrastructure funding at a local level. New regional development banks would include councillors on their boards.
Social care
A Labour government would build a comprehensive National Care Service for England. A previous policy document on the issue said that local authorities will become responsible for planning, designing, delivering and evaluating care services within national frameworks.
Devolution
The party would move officials responsible for the transformation fund to offices in the North of England, and rebuild government offices in the regions, abolished by the coalition government.
Transport
Councils would be given powers and funding to take bus services back in-house, and reinstate routes that have been cut.
Education
Responsibility for delivery of education would sit with local authorities, who would manage admissions. and have responsibility for school places, including the power to open schools. Academies would be brought back under the control of “parents teachers and local communities”.
Service delivery
The party would act to bring outsourced council services back in-house
Housing
Labour would create a new national land trust for England, with powers to buy land more cheaply for low-cost housing. The manifesto promises that councils will deliver 100,000 social rented homes a year by the end of the Parliament, with new legal duties on councils to build them.
IFS director Paul Johnson says: “If you want to transform the scale and scope of the state then you need to be clear that the tax increases required to do that will need to be widely shared rather than pretending that everything can be paid for by companies and the rich.”
Liberal Democrats
Business rates
The tax would be replaced in England with a commercial landowner levy based solely on the land value of land rather than capital value, which the party says would shift the burden of taxation from tenants to landowners.
Council funding
The party says it would “end the continual erosion of local government funding and commit to a real increase in local government funding throughout the Parliament”.
Infrastructure
A £130bn investment in transport and energy systems, building schools, hospitals and homes, including a £50bn regional rebalancing programme, with councils given a say in how the money is spent.
Education
The party says it would reverse cuts to school funding, allowing schools to employ 20,000 more teachers and restore class sizes to 2015 levels using an emergency cash injection. It would also invest to clear the backlog of repairs and give education authorities responsibility for places planning, exclusions, administering admissions including in-year admissions, and SEND functions.
Housing
The party would build 100,000 for social rent each year, and allow local authorities to increase council tax by up to 500 per cent on second homes.
IFS director Paul Johnson says the Lib Dem manifesto “confirms that they are now the only major party committed to reduce the national debt as a fraction of national income, a goal now abandoned by both Labour and the Conservatives”.
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