David Simmonds

Council tax funds about £20.5 billion of expenditure in England on social care, which is 61% of all council funding. It is therefore of huge interest to our constituents. The Prime Minister and Ministers have repeatedly told the House that we need to wait for the spending review and the local government finance settlement to know what will happen with the referendum limit, including at the Dispatch Box yesterday when the Prime Minister told my right hon. Friend the Leader of the Opposition to wait. Shortly afterwards, the press were told that the 5% limit would remain in place. Answers to parliamentary questions show that the Government are expecting spending power to increase by £3.7 billion, funded by grants of £1.3 billion. That demonstrates that the Chancellor’s Budget has opened up a £2.4 billion black hole in council finances. In addition to that, the County Councils Network has highlighted its concerns that although we have not yet had a formal statement in the House, there are proposals to change the way in which funding is allocated, further depriving local authorities in urban, suburban and rural areas of the funding that they need. I would like to put two questions to the Minister. First, will he promise the House that funding allocations through the grant mechanism will follow the cost pressures on local authorities and not any other form of indexation or formula, to ensure that places facing the highest costs receive the funding that they need? Next, while nobody would want to see the referendum limits scrapped simply to bail out central Government, the announcement of the 5% constrains local authorities when it comes to their fundraising. Will the Minister tell the House whether it will be our high streets through increased business rates or whether significant cuts to other council services will be needed to fill the Government’s £2.4 billion black hole?