Today I laid before the House the “Report on Local Government Finance (England) 2021-22”, the “Council Tax referendum principles report 2021-22” and “Council Tax alternative notional amounts report 2021-2022”, which together form the annual local Government finance settlement for local authorities in England.
My Ministers and I have held meetings with representative groups, including the Local Government Association, and with councils and MPs. Representations from 155 organisations or individuals have been carefully considered before finalising the settlement.
Social care
This Government are dedicated to supporting the most vulnerable, which is why this settlement provides access of up to an additional £1 billion of funding for adult and children’s social care, comprising £300 million in grant and a 3% adult social care precept. In the interests of stability, the Government propos to roll forward allocations of the £1.41 billion 2020-21 social care grant and continue the 2020-21 improved better care fund at £2.1 billion.
Our proposal is to use £240 million of the additional £300 million social care grant as an “equalisation” component, to level the playing field, recognising that the distribution of resources generated through the adult social care precept does not match the pattern of assessed need. The remaining £60 million will be allocated directly through the existing adult social care funding formula.
New homes bonus
Following consultation, the Government are proposing a new round of 2021-22 (year 11) new homes bonus payments. This will be the final set of allocations under the current approach.
The Government are committed to developing a more efficient and effective way of incentivising housing growth, which is why I am pleased to announce that we plan to consult shortly on the future of the new homes bonus.
Lower tier services grant
The Government are proposing a new un-ringfenced lower tier services grant in 2021-22, which will allocate £111 million to local authorities with responsibility for lower tier services.
As part of this, the Government are proposing a minimum funding floor, at a cost of £25 million, so that no authority, either upper or lower tier, will have less funding available in 2021-22 than last year. This minimum funding floor is in response to the current exceptional circumstances and is a one-off.
Minor changes have been made to all allocations proposed at the provisional settlement to take account of changes to new homes bonus allocations arising from updated house completion statistics.