Latest news with #fundingreform
The Independent
9 hours ago
- Business
- The Independent
Labour plans council tax shake-up that could see rich areas pay more
Labour is proposing a significant reform to council tax funding, aiming to make it fairer by directing more central government funds to areas with the highest need. The new approach seeks to alleviate the burden on local authorities that currently impose large council tax increases with little return, by enabling them to request lower rises. The reform will likely result in less central funding for areas where local services are not as stretched. A Ministry of Housing, Communities and Local Government official said the current system has led to "perverse outcomes" and the new plan aims to be fairer to councils that have historically faced difficult financial decisions. A consultation has been launched by the MHCLG to evaluate how new funding allocations will be made, including assessing needs for adult social care, children's social care, and Special Educational Needs and Disabilities funding.
Telegraph
16 hours ago
- Business
- Telegraph
Rayner ‘wants council tax rise in the south to fund the north'
Council tax bills will rise in the south to fund investment in the north, it has been reported. Angela Rayner, the deputy prime minister, is to announce plans for a 'progressive' funneling of Government grants to authorities in deprived areas. According to The Times, Ms Rayner will set out a new formula which will see the grants redistributed depending on local needs. The changes are expected to reduce the grant funding received by wealthier local authorities in London and the south east, which experts said would likely prompt council tax hikes to make up for any shortfalls. Approximately half of council incomes currently come from Government grants. Ms Rayner will reportedly cite discrepancies in council tax levies between richer and poorer areas. A three-bedroom semi-detached house in Hartlepool, Co Durham, comes with a higher levy than an £80 million mansion in Westminster. David Phillips, of the Institute for Fiscal Studies, told the newspaper that reform was overdue. 'It's been 20 years since we've had an effective system to allocate funding between councils so it is out of whack and the changes are going to be big,' he said. 'We would expect urban areas in the Midlands and north to benefit, and maybe some of the east London boroughs. But the Westminsters and Wandsworths of this world, which set very low council tax, will lose.
