Hopes for long term funding for Reading council from government

Since 2017/18, local councils have received one-year local Government financial settlements from the Government, which provides councils with grants.

The decision was made by the Conservative Government of the time which has proved divisive.

While advocates suggest the funding methods cut down on waste, the Local Government Association has argued that the one-year settlements are unstable and discourage long-term planning by councils.

But they now hope that the era of one-year settlements is coming to an end, as the Labour Party promised to scrap them during the General Election campaign.

However, it has been predicted that councils will get another one-year settlement for the next financial year in 2025/26.

The funding situation for local authorities was recently discussed at a Reading Borough Council meeting.

In a question, councillor James Moore (Liberal Democrats, Tilehurst) said: "Given that the Labour Party is now in Government, will the ruling Labour administration at the council commit to working with the Government to review and reform the Local Government Finance Settlement, ensuring that councils like Reading receive fair and sustainable funding to support vital services for our residents?"

Reading Liberal Democrat councillors, all representatives for Tilehurst: Meri O Connell, new group leader James Moore and Anne Thompson. Credit: Reading Liberal Democrats

He also asked how the Labour administration will lobby for multi-year settlements on a national level.

The question was answered by Liz Terry (Labour, Coley), the council leader.

She said: "The Labour manifesto gave a commitment to multi-year funding settlements and that commitment remains now that we have a Labour Government.

"However, given the £22 billion hidden hole in Government budgets inherited from the last Conservative Government, as confirmed by the Chair of the Office for Budget Responsibility, I understand that it is most likely that there will be another one-year funding settlement this year, ahead of a multi-year settlement next year."

Councillor Liz Terry (Labour, Coley) the leader of Reading Borough Council.

Answering what she is doing to lobby the Government, cllr Terry said that she is lobbying the three Reading Labour MPs on the council’s financial situation.

She also complained about the bidding system, whereby councils would compete against each other for Government funding for projects.

Cllr Terry welcomed the Government 'moving away from competitive bidding processes that waste much time and energy often for nothing'.

The council had a strong record of competing for Government funding, winning £26.3 million for its bus service improvement plan, £19.1 million for its new library and Hexagon Theatre projects,  £1.179 million for cycle lanes in Shinfield Road and £1.3 million for lanes in Bath Road.

READ MORE: Blow for council as bid to improve junction for controversial cycle lane fails

Cllr Terry continued: "Yes – this administration will advocate for funding reform and I expect confirmation of multiyear settlements in due course.

"I have had the opportunity to speak to the Minister of State for Local
Government and English Devolution along with other local Government leaders and I know that he understands the pressures facing local Government.

"But let us be honest, this Government has a great deal to do to fix broken Britain and I do not expect everything to be fixed all at once as it would seem most political commentators do.

"I am sure the minister and many others in Government want to avoid more councils issuing s114 notices or asking for exceptional financial support and understand that we need an increase in council funding that reflects current costs and demands for services."

S114 notices are issued when a council declares itself bankrupt. Examples include Slough Borough, Birmingham City and Nottingham City councils.

The answer was given at the full Reading Borough Council meeting on October 15.

The local Government minister is Jim McMahon OBE, Labour MP for Oldham West, Chadderton and Royton.