Lyn Brown – 2015 Parliamentary Question to the Department for Communities and Local Government

The below Parliamentary question was asked by Lyn Brown on 2015-02-09.

To ask the Secretary of State for Communities and Local Government, what assessment he has made of the effect of population growth on local government finance needs.

Kris Hopkins

Parliament approved the Local Government Finance Report for 2015-16 on 10 February 2015. The settlement is fair to all; councils with the highest needs have higher spending power per household than those with lower needs.

The focus of the settlement has deliberately changed away from keeping authorities dependent on grant, to providing them with the tools they need to grow their economies. As a result, although we took into account relative needs when setting the baseline for the new system, we have frozen this to maximise the incentive effect. All councils can benefit from the incentives for growth we have put in place – the New Homes Bonus and business rates retention.

For example Newham’s retained income from Business Rates in 2013-14 was just under £7 million above its baseline funding level; and the authority’s own forecasts suggest it will be over £10 million above its baseline funding level in 2014-15. In addition Newham’s housing stock has increased by over 8,000 units over the period of the New Homes bonus scheme, providing a further £28 million of funding to the Borough in the years to 2015-16.