Greens slam Labour claims about council funding

Greens have accused Bristol Labour of misleading the public regarding how Bristol City Council will be funded by the Government, calling out public statements issued by Bristol Labour MPs and the Bristol Labour group of councillors as “disingenuous verging on dishonest.”

This comes after the publishing of the new Labour government’s provisional Local Government Financial Settlement (LGFS) in December. The Local Government Finance Settlement is an annual process that distributes core resources to local government. It includes grant, locally retained business rates, and council tax.

The Greens, who lead Bristol City Council, say that while the council’s overall available funding over this period will see average annual increases of 6.8%, the Government is forcing Councils to obtain this increase from year on year maximum council tax rises, coupled with increased retention of business rates.

Direct government grants, within the settlement will, on the other hand, be cut by over 60% by 2029/30. The Fair Funding allocation included in the settlement for 26/27 is a cumulation of existing grants which used to be allocated separately to the council, but is fact smaller than previous years, with an expectation that Bristol will get more of its funding from local taxation, supported by allowing the council to keep all business rates collected locally.

These factors mean that in the next three years, the amount of council funding that comes from residents and businesses will increase from 80% to 95%.

Immediately following the government publication, Labour in Bristol had been quick to welcome the settlement, claiming that it showed that the Labour government will be increasing Bristol City Council’s spending power by £160m by 2029/30 compared with 2024/25 – a rise of approximately 30%.

Councillor Tony Dyer, Leader of Bristol City Council, said “For Labour to claim that any increase in funding that comes from council tax and business rates should be seen as additional funding from the Labour government is disingenuous, verging on dishonest.

“While we welcome the Government allowing Bristol to retain a greater proportion of locally generated business rates, the fact is that any increase in our spending power will be paid for by Bristol residents through increased council tax and businesses.

“The reality is that the government is actually reducing its grant funding to the city by over £70m per year by 2029/30.

“When coupled with rising demand and costs in key services, this means that Bristol City Council, in common with almost all other councils, will still need to make significant savings in order to deliver a balanced budget.”

The Greens have also said that the increased settlement is insufficient to cover the rising costs and demand of essential council services, including Children’s Social Care, without also making savings elsewhere in the council’s spending.

Councillor Heather Mack, Deputy Leader of Bristol City Council, said “Councils all over the country are facing the same pressures.

“Increasing need and costs for key council services like children’s social care, temporary accommodation and adult social care are going to result in an additional pressure on our budget of £115 million a year by 2029/2030, which will not be covered by this increase.

“This Government needs to urgently address these issues at a national level to help not only Bristol, but Councils across the country.

Councillor Patrick McAllister, chair of the Finance Subcommittee, said “By wholeheartedly welcoming this settlement, Bristol Labour are supporting the maximum rise in council tax over the next three years.

“Greens have long said that Council Tax is a regressive tax and continue to lobby the government to reform local taxation to create a more progressive and fair system.

“Bristol is one of few councils to still offer a 100% council tax reduction scheme, which represents a very large cost to the council and we are committed to maintaining – if Labour were serious about helping working people, the least this Government could do is reinstate the Council Tax Benefit scheme.”

Bristol City Council will meet in February to set a balanced budget, which will be put forward by the Strategy and Resources Policy Committee.