Devolved government finances

Last week, the IFS published research on how the impact of the COVID-19 crisis on consumer spending and behaviour has varied across the country. In a new observation, we consider the implications of this research for local government.

Last week saw significant political debate about the amount of extra funding being given to English councils moving into tier 3 (‘very high alert’) of the government’s COVID alert system. Most of the attention focused on funding to help pay for additional business support measures – such as grants for businesses legally able to open but facing big falls in demand – on top of those being funded directly by central government.

The COVID-19 crisis is increasing councils’ spending and reducing their incomes. This report analyses councils’ forecasts of these pressures and potential policy responses.

European Structural and Investment (ESI) funds help to pay for initiatives supporting business development, research and development, investment in digital and green infrastructure, as well skills and training interventions and support for job-seekers. But with the UK having formally departed the European Union, the country will stop receiving new ESI funding at the end of 2020. Thus, for 2021 and beyond, the UK government faces choices over what to replace ESI funding with.

Council tax bands in Wales are based on property values in April 2003 – 17 years ago. That is more up to date than in England and Scotland, where they are based on values in April 1991 (almost 30 years ago!). But it is still enough time for the relative values of different properties to change significantly: for example, official estimates suggest that while average prices had doubled since 2003 across Wales as a whole by the end of 2019, those in Blaenau Gwent had risen 171% compared with just 77% in Wrexham.

Local government funding is rarely a major battleground in election campaigns. This ‘rule’ appears to be holding in the current campaign, despite evident pressures in areas like adults’ and children’s social care services, following a decade of cuts to councils’ funding.  This observation looks at the plans for English local government funding set out in the Conservative, Labour and Liberal Democrat manifestos – which differ vastly.

Some have claimed that Boris Johnson's tax pledges mean Scots would end up paying for a tax cut for higher earners in the rest of the UK. This is not

We are in the midst of major changes to local government funding – both its level and the system for raising and distributing it. This note brings together some of the key findings of our research on this topic and highlights where to find further information.

Funding from local taxes available in the new local government finance system proposed by the government is unlikely to keep pace with rising spending pressures in coming years.

Following the provisional local government finance settlement for 2019–20, we look at how the funding cuts made over the four years between 2015–16 and 2019–20 are set to vary around the country.

Analysis of the SNP’s Sustainable Growth Commission’s proposals