Today’s provisional local government finance settlement confirms our expectation the Government will continue with no referendum principles for local councils in 2021-22, which as you know we have continued to lobby for and was in our spending review submission.

The relevant section is on page 12 of the consultation document:

3.5 Council tax referendum principles for town and parish councils

3.5.1 In 2018-19, the Government announced that it did not intend to set referendum principles for town and parish councils for three years. This was contingent on the sector taking all available steps to mitigate the need for council tax increases and the Government seeing clear evidence of restraint in the increases set by the sector.

3.5.2 In 2020-21, the average Band D parish precept increased by 4.0%. This was the lowest percentage point increase in parish precept since 2012-13 but remains in excess of the rate of inflation.

3.5.3 In expectation that parish and town councils continue to show restraint when setting council tax precept levels, the Government proposes to continue with no referendum principles for town and parish councils in 2021-22. The Government will take careful account of the increases set by parishes in 2021-22 when reviewing the matter ahead of next year’s settlement.

Other headlines include:

• a uniform percentage increase in 2020-21 Revenue Support Grant (RSG) allocations, based on the change in the Consumer Price Index (CPI)
• a core council tax referendum principle of up to 2% for shire counties, unitary authorities, London boroughs, the Greater London Authority (GLA) and fire authorities
• a bespoke council tax referendum principle of up to 2% or £5, whichever is higher, for shire district councils
• an Adult Social Care (ASC) precept of 3% for authorities responsible for ASC, with the option to defer some or all of its use into 2022-23
• a referendum principle of £15 for police and crime commissioners
• setting no council tax referendum principles for Mayoral Combined Authorities
• a new round of NHB payments in 2021-22, which will not attract new legacy payments
• a new Lower Tier Services Grant of £111 million to local authorities with responsibility for lower tier services (for example, homelessness, planning, recycling and refuse collection, and leisure services).
• increase Rural Service Delivery Grant by £4 million, taking the total to £85 million

We will be responding to the consultation to welcome this proposal, also taking the opportunity to highlight the continued financial pressures placed on our councils from Covid funding to local government not being passed on and not being eligible for the Income Compensation Scheme.

The final settlement is expected to be published in late January/early February and debated and agreed by the House of Commons.