Monday 7 February 2022
Levelling Up, Housing and Communities
Local Government Finance Settlement for England: 2022-23
Today, I am laying before the House “The Local Government Finance Report (England) 2022 to 2023” and “The Referendums Relating to Council Tax Increases (Principles) (England) Report 2022/23”, which together form the local government finance settlement for local authorities across England for 2022-23.
Having considered representations made by stakeholders across the country on the provisional settlement announced on 16 December, I am pleased to put before the House a settlement that focuses on stability and certainty. Indeed, no council will see a reduction in core spending power in cash terms for 2022-23 compared to 2021-22. The consultation received 148 representations from organisations, individuals and businesses, which have been diligently considered before finalising the settlement.
The settlement I have announced today:
Makes available an additional £3.7 billion for councils, an increase in funding for councils of over 4.5% in real terms for 2022-23. It will ensure councils have the resources they need to continue delivering key services for their communities. Overall, this means up to £54.1 billion of funding will be available for core services;
Provides a new, one-off grant to support all services delivered by councils worth £822 million;
Makes available over £1 billion of additional funding specifically for social care; and
Protects hard-working taxpayers from unfair hikes in rates, with a 2% core threshold and additional flexibilities for certain authorities, including 1% for councils responsible for adult social care services.
2022/23 Services grant
Over the spending review period, local government will have access to around £1.6 billion in additional grant per year for the next three years. This includes funding for supporting families and cyber resilience, which will be distributed outside of this settlement.
I intend to proceed with the creation of a one-off 2022-23 services grant worth £822 million, distributed using the existing settlement funding assessment. This funding will be excluded from any proposed baseline for transitional support in future years.
Adults and children’s social care
I recognise that social care, for most councils, continues to be a key priority and therefore an area that incurs increased and sustained cost pressures. This Government remain committed to supporting local government in providing a good quality of care to the most vulnerable.
This is why I intend to make available an additional £1 billion for social care in 2022-23. This includes putting £636 million more into the social care grant, which includes funding for equalisation against the 1% adult social care precept. The Government are committed to allocating funding in line with our assessment of where relative need is, and that is exactly what equalisation does. We are also providing a £63 million inflationary uplift to the improved Better Care Fund, which supports integrated working with the NHS.
This, alongside deferred adult social care precept flexibilities of up to 3% from last year’s settlement, forms a package of additional resource, specifically for social care, potentially worth over £1 billion.
On top of this funding, £162 million in adult social care reform funding will be allocated in 2022-23 to support local authorities as they prepare their markets for adult social care reform and to help move towards paying a fairer cost of care.
This Government recognise the importance of high-quality local services and believe in empowering local decision makers to shape thriving communities. This includes ensuring they have the flexibility to generate their own income through council tax, while protecting residents from excessive increases.
This settlement means: a core council tax referendum principle of up to 2%; an adult social care precept of 1% for all authorities responsible for ASC; a principle of up to 2% or £5 for shire district councils, whichever is higher; a referendum principle of £10 for police and crime commissioners; and a £5 referendum principle for the eight lowest-charging fire and rescue authorities. This settlement proposes no other council tax referendum principles for mayoral combined authorities or town and parish councils.
The Mayor of London has requested flexibility to levy an additional £20 on band D to the Greater London Authority precept to provide extra funding for Transport for London. The Government have expressed ongoing concern about the management of TfL by this Mayor, and it is disappointing that London taxpayers are having to foot the bill for the GLA’s poor governance and decision making. While the Government will not oppose this request, any decision to increase the precept is solely one for the Mayor, who should take into account the pressures that Londoners are currently facing on living costs and his decision to raise council tax by 9.5% last year.
The Government’s manifesto commits to continuing to protect local taxpayers from excessive council tax increases, and it is for the House of Commons to set an annual threshold at which a council tax referendum is triggered. This is an additional local democratic check and balance to avoid a repeat of what was seen under the last Labour Government when council tax more than doubled.
This package of referendum principles strikes a fair balance. The council tax referendum provisions are not a cap, and nor do they force councils to set taxes at the threshold level.
Councillors, mayors, police and crime commissioners, and local councils will rightly want to consider the financial needs of local residents at this challenging point in time, alongside the public’s support for action on keeping our streets safe and providing key services.
Last week, the Government also confirmed a £150 non-repayable council tax rebate to households in England in bands A to D to help with rising costs. The rebate to bills will be made directly by local authorities to households from April. Local authorities will also have a share of the £144 million discretionary funding that can be used to target additional support at those most in need. Local authorities are best placed to do this, which is why the Government have given this flexibility.
Stability of funding
This is a settlement that is designed to provide stability to the sector by rolling over much of last year’s settlement. This includes:
Increasing the revenue support grant in line with inflation, which means an increase of £70 million;
Rolling over the current approach to the new homes bonus, worth £556 million;
Rolling over the current approach to the rural services grant, worth £85 million;
Maintaining the lower tier services grant, at £111 million, with an updated funding floor; and
Continuing with the 100% retention authorities in the five devolution deal areas and 67% for Greater London overall.
Looking ahead, the Government are committed to ensuring that funding allocations for councils are based on an up-to-date assessment of their needs and resources. My officials and I will work closely with local partners and take stock of the challenges and opportunities they face before consulting on any potential funding reform.
Finally, in recognition of the unique circumstances facing the Isle of Wight Council and its physical separation from the mainland, we are providing an additional £1 million for 2022-23.
This settlement is one that makes available an additional £3.7 billion to councils. In total, core spending power is expected to rise from £50.4 billion in 2021-22 to up to £54.1 billion in 2022-23, which will enable local government to continue providing key services to their local residents.
Councils are the frontline of public services within local communities and are the first port of call for so many people, from delivering critical social care services at every stage of people’s lives, to making sure we have efficient and effective waste services in place. This Government recognise the vital role they play in our society. This is a settlement that recognises that role.
Private Parking Code of Practice
I am informing the House that the Government are today publishing the Private Parking Code of Practice. This is a key milestone which takes forward the implementation of the Parking (Code of Practice) Act 2019, which was introduced by my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) and supported by the Government.
The code sets out the requirements that parking operators must follow when enforcing parking restrictions in England, Scotland and Wales. These include a compulsory 10-minute grace period to prevent operators issuing charges for being just a few minutes late, higher standards for signage and surface markings, and a crackdown on the use of aggressive and pseudo-legal language.
These changes will bring much-needed consistency to the private parking sector, benefiting millions of motorists. It will boost our high streets and town centres by making it easier for people to park near their shops without being unfairly fined.
Operators will need to make some changes to adhere to the new code. The code will come into force following an implementation period to give the industry time to adapt.
Parking operators will be expected to fully adhere to the code before 2024, by which time we will have introduced a new single appeals service for motorists to challenge unfair private parking charges. The industry should update their processes and procedures as quickly as possible from today so that motorists can benefit from the new code immediately.
The code has been produced through extensive consultation with key stakeholders, including consumer and industry representatives, which took place through a steering group appointed by the British Standards Institution. We have published a fuller account of this process in our Private Parking Code of Practice explanatory document, which accompanies the code. This document also explains the provisions of the new code in an accessible manner and assesses the impact of the changes on motorists and the parking industry.
There were a number of issues relating to the code which the Government consulted on separately, in parallel with the BSI process. This included proposals to bring private parking charges into closer alignment with local authority penalty charge notices.
Alongside the code, the Government have now also published their response to this further technical consultation on private parking charges, discount rates, debt collection fees and an appeals charter, which ran from July to August 2021.
After a careful consideration of respondents’ views, the Government have decided to bring private parking charges into closer alignment with the system in local councils. This means that parking charges will be more proportionate to the level of harm caused.
We are also prohibiting parking operators and debt recovery agencies from levying additional enforcement fees over and above the cost of parking charges.
We will review these arrangements as part of a more general review of the code within two years of it coming into force.
The code is part of a wider enforcement framework, which includes a new certification scheme for parking operators, the establishment of a scrutiny and oversight board to monitor the new system and the creation of a single independent appeals service.
As per our commitment in the Government’s response to our previous Code Enforcement Framework consultation in March 2021, I can now update the House that we have begun a product discovery to inform the design and delivery of the single appeals service. We will finalise the certification scheme for operators and establish the scrutiny and oversight board this spring. In autumn of this year, the conformity assessment bodies will have received their accreditation and will begin to certify parking operators against the code’s new requirements.
Spring 2022: certification scheme finalised, and scrutiny and oversight board appointed.
Autumn 2022: conformity assessment bodies (CABs) accredited by United Kingdom Accreditation Service.
From autumn 2022: all new car parks will conform to the new code.
End of 2023: Single appeals service appointed and transition period ends. Parking operators must now follow the requirements of the new code of practice.
We now welcome parliamentary scrutiny of the code of practice. I will return to update the House in future on the further implementation of the code, its wider framework and the single appeals service.
Financial Services and Markets Act 2000 (Exemption) (Amendment) Order 2022
Today I have laid the Financial Services and Markets Act 2000 (Exemption) (Amendment) Order 2022 (SI 2022/100) before Parliament. This will permit Norges Bank, the Norwegian Central Bank, to continue to benefit from access to the UK market without requiring authorisation under the Financial Services and Markets Act 2000 (FSMA) in respect of specific activities under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. These activities are: dealing in investments as principal, dealing in investments as agent, managing investments, arranging, safeguarding, and administering investments, and advising on investments.
Furthermore, so far as relevant to any such activity, this order also exempts Norges Bank from being required to obtain authorisation in respect of regulated activities of the kind specified in article 64 (agreeing to carry on specified kinds of activity) of the regulated activities order, pursuant to article 5(2) of the exemption order.
Prior to the UK’s departure from the European Union, Norges Bank, as an EEA central bank, benefited from an exemption from the requirements to be authorised under the provisions of FSMA. Norges Bank operates Norges Bank Investment Management, which manages investments on behalf of the Government Pension Fund Global. Under the EEA central bank exemption, it was permitted to undertake regulated activities in the UK without authorisation. A temporary transition power allowed a directive to be issued through which relevant EEA firms may continue activities that they were previously undertaking. As enabled by the TTP, Norges Bank has benefited from this exemption, which will expire at the end of March 2022.
HM Treasury has, in consultation with the Bank of England/Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), considered Norges Bank’s suitability for an exemption as provided under section 38 FSMA, and has determined that Norges Bank is suitable for listing as an exempt person in respect of specified activities outlined above. This will allow Norges Bank to maintain its current UK position by carrying out the same activities that they are currently undertaking, with regulatory certainty and without a need for authorisation.
The legislation laid today is intended to come into force on 31 March 2022.
Digital, Culture, Media and Sport
Online Safety Bill: Priority Offences
I wish to inform the House that the Government will be making a change to the Online Safety Bill, to set out priority offences in primary legislation on the face of the Bill.
This change responds to the calls for greater clarity about the criminal offences in scope of the new regulatory framework, and will increase the pace of implementation of the regulatory regime.
Specifically, this change responds to calls from the Online Safety Bill Joint Committee and the Digital, Culture Media and Sport Committee’s Sub-Committee on Online Harms and Disinformation, which recommended that the most relevant criminal offences should be included in primary legislation. The Petitions Committee further specified a number of offences that it believes should be listed, including hate crime.
We plan to include offences within the following categories on the face of the Bill:
Encouraging or assisting suicide.
Offences relating to sexual images, including revenge and extreme pornography.
Incitement to and threats of violence.
Public order offences, harassment and stalking.
Weapons and firearms offences.
Fraud and financial crime.
Exploiting prostitutes for gain.
Organised immigration offences.
Offences relating to terrorism and child sexual abuse and exploitation are already listed in the Bill. The Secretary of State will have the ability to designate additional offences as priority by statutory instrument, which will be subject to parliamentary scrutiny.
Priority offences represent the most serious and prevalent illegal content and activity online. Companies will need to take proactive steps to tackle such content. Companies will need to design and operate their services to be safe by design and prevent users encountering priority illegal content. This could include, for example, having effective systems in place to prevent banned users opening new accounts.
Beyond the priority offences, all services will need to ensure that they have effective systems and processes in place to take down quickly other illegal content once it has been reported or they become aware of its presence.
Listing the priority offences on the face of the Bill, instead of in secondary legislation, is an important step in strengthening this pioneering legislation designed to make the UK the safest place in the world to be online. This will mean that platforms do not need to wait for secondary legislation to start tackling the most serious illegal content.
We will respond fully to all three Committees’ reports in due course alongside introduction of the Bill, and thank them for their recommendations.
Health and Social Care
Local Authority Public Health Grant 2022-23
Today I am publishing the public health grant allocations to local authorities in England for 2022-23.
Funding for local government’s health responsibilities is an essential element of our commitment to invest in preventing ill health, promoting healthier lives and addressing health disparities and an important complement to our plans to invest strongly in both the NHS and social care.
The 2021 spending review maintains the public health grant in real terms for the spending review period. This will enable local authorities to continue to invest in prevention of ill health and essential frontline services like child health visits, drug treatment and sexual health services.
Through the public health grant and the pilot of 100% retained business rate funding which provides funding in lieu of the grant for local authorities in Greater Manchester, we are investing £3.417 billion in local authority public health in 2022-23, providing each local authority with a 2.81% cash terms increase.
The public health grant to local authorities is part of a wider package of investment in improving the public’s health, including additional targeted investment over the spending review period of £300 million to tackle obesity; £170 million to improve the Start for Life offer available to families, including breastfeeding support and infant and parent mental health; and £560 million to support improvements in the quality and capacity of drug and alcohol treatment.
The 2022-23 public health grant will continue to be subject to conditions, including a ring-fence requiring local authorities to use the grant exclusively for public health activity.
Full details of the public health grant allocations to local authorities for 2022-23 can be found at: www.gov.uk. This information will be communicated to local authorities in a local authority circular.
Transport for London Funding Settlement: Interim Extension
Following my statement to the House on 5 January, I am updating the House on an interim extension of the current Transport for London (TfL) funding settlement that was due to expire on 4 February 2022 by two weeks to 18 February. This has been agreed by the Mayor of London.
Since the start of the pandemic, we have supported the transport network in London with over £4.5 billion funding through extraordinary funding settlements for Transport for London. We have recognised the reliance of London’s transport network on fare revenue, and Government continue our commitment to mitigating loss of fare revenue because of the pandemic.
Government are committed to supporting London’s transport network as we have since the start of the pandemic, and are in discussions with TfL on a fourth funding settlement. This short extension will enable us to finalise the terms of a robust settlement for this period, ensuring TfL and the Mayor take steps to move towards financial sustainability. In this extension, Government will continue to ensure the provisions of the existing agreement are delivered while providing continued certainty to Londoners as we move out of plan B restrictions.
Support to Transport for London has always been on the condition that Transport for London reaches financial sustainability as soon as possible and with a target date of April 2023 and Government continue to press the Mayor of London and Transport for London to take the decisions needed to put the organisation on a sustainable footing. I will update the House at my earliest opportunity on the details of the fourth funding settlement.