Latest Public Sector News


Consultation for new LG finance system ‘not just a paper exercise’

The government’s formal consultation on the relative needs and resources of local government finances is aiming to create a “whole new system,” Sajid Javid has stated this week.

Speaking at the LGA’s Finance Conference yesterday, the newly reappointed housing and communities secretary said that the thinking behind this year’s finance settlement was to give local administrations the freedom to be a truly local government, though he also accepted that: “last month’s draft wasn’t greeted with wild enthusiasm from the sector.”

Javid reiterated that the settlement is part of a broader process aiming to establish what local government needs to continue to deliver services – but the housing and communities secretary explained that there are still plenty more discussions to be had.

“We need an updated and more responsive way of distributing funding,” he told delegates. “One that gives councils the confidence to face the challenges and opportunities of the future.

“That’s why I was pleased to launch a formal consultation on relative needs and resources. It’s not just a paper exercise.

“It’s going to be used to create a whole new system - one that fairly reflects modern needs, and I hope to have that system in place by 2020-21.”

The cabinet minister continued: “We’re building a country that’s fit for the future.

“This review will make sure that we have a local government finance system that’s suited to the challenges and the opportunities of the years that lie ahead.”

Javid added that alongside the new methodology, the ministry is also implementing the latest phase of its business rates retention plan.

The government hopes that local authorities will retain 75% of business rates by 2020-21, which the politician said will be achieved through incorporation of existing grants into the programme, such as the revenue support grant and the public health grant.

Councils will also be able to keep 75% of the growth in their business rates from the new baselines in 2020-21 when that system is reset, and there are plans in place to increase business rates retention further when it is right to do so.

Javid went on to say that it was “no surprise” that the 100% retention pilots had proved so popular with councils up and down the country.

Originally, plans were in place for an additional five pilots, but Javid said that they had been “overwhelmed” with responses.

Over 200 local authorities put themselves forward for the scheme, and yesterday the secretary announced 10 further pilots, covering a large geographic and demographic spread, with more piloting planned for 2019-20.

Top Image: MarioGuti

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.


There are no comments. Why not be the first?

Add your comment



public sector executive tv

more videos >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the open more > more last word articles >

public sector focus

View all News


The digital buying community is live

12/11/2018The digital buying community is live

Many of the requirements from buyers posted on the Digital Marketplace were... more >
A force to be reckoned with

12/11/2018A force to be reckoned with

The South Bank plan, which refers to a number of investments and proposed a... more >


New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has... more >

the raven's daily blog

Blog: 5 minutes with Gary Wallis-Clarke, member of the Northern Powerhouse Education and Skills Group

12/12/2018Blog: 5 minutes with Gary Wallis-Clarke, member of the Northern Powerhouse Education and Skills Group

Ahead of the upcoming networking extravaganza EvoNorth, we caught up with Gary Wallis-Clarke, a member of the Northern Powerhouse Education and Skills group, executive he... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >