LGA election manifesto highlights £5.8bn funding gap

Political parties must commit to investigating opportunities for councils to generate local revenue, according to the Local Government Association.

In its 2017 general election briefing, the LGA repeated its estimate that local government currently faces an estimated funding gap of £5.8 billion by 2019/20.

Its call for greater revenue raising powers comes a week after national commentators criticised councils for using powers to raise income through property acquisitions.

The LGA briefing said that the next government should give “councils the freedom to set local fees and charges, such as planning and licensing fees to appropriate local level that at least recovers local costs”.

In addition, local authorities should be given more flexibility over council tax setting, including council tax levels, discounts and banding.

There should be a debate to establish the possibility of assigning other national taxes to local government.

“This debate should also investigate the opportunity to generate other revenue locally,” the LGA said.

On Brexit, the LGA said that parties should commit to working with local government to develop a replacement for European regional aid, currently provided by the European Union.

In a separate briefing last year, the association said that a replacement scheme should be worth £5.3bn for England and £1.8bn for Wales, matching the current funding levels.

“The UK’s exit from the European Union (EU) is going to provide opportunities to do things differently, as well as creating challenges that will need to be addressed,” the LGA said.

The LGA also called for the government to press ahead with business rates retention after the Bill introducing the measures was scuppered by the calling of the election.

It suggested a “wide ranging review of business rates, aiming to modernise the way they affect different ratepayers, to ensure that sectors such as online businesses make a fair contribution and that councils are given maximum flexibility on reliefs.”

A time limit on challenging and appealing business rates valuations should also be introduced, the briefing continued.

On social care, the association recommended closing the funding gap of £2.3bn facing social care by “ensuring additional funding to councils is continuous and put into local government baselines”.

A separate report by the Institute for Fiscal Studies this week claimed that councils could wipe out all cuts made to social care since 2009 if they made maximum use of powers to raise council tax.