Funding the future for local authorities

By Christian Wall | 23 April 2020

Although it seems a lifetime ago, the chancellor’s budget, while generally well received by local government, gave little clarity in areas critical to its future.  The reduced cost of borrowing from the Public Works Loan Board for housing revenue account (HRA) projects, restoring the rate to pre- October 2019 levels, was a clear demonstration of the Government’s priorities.  However, with little clarity over fair funding and the spending review, proposed business rates reform further increased uncertainty even before COVID-19 took hold.

The Government’s finances are in tatters as the chancellor strives to contain the calamitous economic effects of the COVID crisis.  The Government has committed to spending far in excess of the 15% of GDP commonly reported even before loss of revenues and the drop in economic activity are taken into account.  Faced with a tidal wave of demands for help, it is apparent local government is not at the top of the Government’s priorities.  Whether it should be, right now, is a pointless debate, but the future of local government and its funding will become increasingly important once the immediate crisis has passed.

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