Steve Reed

I agree with the Chair of the Housing, Communities and Local Government Committee that council tax cannot be the only means to fix these problems. That is why we have increased the level of funding overall and reconnected it with the deprivation indices that tell us which areas have the greatest need, and should therefore get a fair share of the available funding. The Home Secretary and I have also agreed an additional £3.50 council tax flexibility for six police and crime commissioners in 2026-27, where that was critical to financial sustainability in maintaining law and order. It is for councillors, mayors and police and crime commissioners to set their own council tax, and to take into account the impact on households when making those decisions. Nationally, council tax will not increase by more than it did last year. Six local authorities set council tax bills between £450 and £1,000 lower than the national average because of the high value of homes in their areas. The previous Government made no adjustment in the funding formula for this, creating unfairness. It is not fair that people living in our poorest communities should subsidise rock-bottom bills in some of our wealthiest areas, so I am giving those councils additional flexibility to manage their budgets as we align funding with need, as we should. For councils that need some support to balance their budgets this year, we will no longer just sign off borrowing or the sale of assets without a credible approach to reforming services to get back to financial stability. Later this month, I will confirm arrangements for supporting councils in the most difficult positions, but they will be expected to bring forward plans for more effective and sustainable services, built on sustainable budgeting into the future.