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Increase in precept and planning fees freedom rumoured for autumn statement

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An increased social care precept, new borrowing powers for combined authorities and a raft of measures to tackle the housing shortage are all under consideration ahead of next week’s autumn statement, LGC has learned.

A number of sources have disclosed ministers are giving serious consideration to increasing the social care precept in a bid to alleviate growing funding pressure.

The existing precept, introduced in April, allows top-tier councils to increase council tax by 2% above the 1.99% referendum threshold. All but eight eligible councils took up the precept this financial year.

It is not clear what the preferred percentage increase would be.

While councils would welcome the extra freedom, there is concern in the sector that the precept does not necessarily raise significant additional funds in the areas that need it most. This is because the amount that can be raised is determined by the size of a local authority’s council tax base.

Commenting on the possibility of an increased precept at last week’s County Councils Network conference, Izzie Seccombe (Con), chair of the Local Government Association’s community and wellbeing board, said that in areas where council tax bands were low, increasing the social care precept amounted to “penalising poor people to pay for even poorer people”.

Meanwhile, combined authority sources have told LGC they are hopeful ­chancellor Philip Hammond will act to relax restrictive borrowing rules when he addresses MPs on ­Wednesday.

Izzi Seccombe

Izzi Seccombe

Izzi Seccombe

At present legislation only allows combined authorities to borrow money for a purpose relevant to the body’s transport functions, meaning obtaining funds for investment related to housing or other infrastructure involves a bureaucratic and convoluted process.

Both Greater Manchester and West Midlands combined authorities have been making the case for greater freedoms.

West Midlands chair Bob Sleigh (Con) told LGC: “Twenty-five per cent of our combined authority’s ­devolution deal in essence relates to non-transport issues so we are looking for [borrowing] flexibilities in those areas.”

The chancellor is also expected to use the autumn statement to herald a number of measures that will form part of a housing white paper that will be published soon afterwards.

Ideas reported to be under discussion include greater freedom for councils over planning fees and action to tackle so-called land banking by developers.

The Local Government Association estimates developers are sitting on land with planning permission for more than 400,000 homes that are yet to be built.

A ‘use it or lose it’ approach was rumoured to be under consideration by Treasury officials earlier this year. One idea understood to have been discussed is allowing councils to refuse to grant planning permission to a developer that has a poor track record of building.

Housing minister Gavin Barwell indicated at last month’s Conservative party conference that the government was preparing to provide councils with more flexibility over planning fees.

Richard Blyth, head of policy at the Royal Town Planning Institute, told LGC the likely options ranged from allowing councils to increase planning fees by the rate of inflation since 2012, which was negligible, to allowing full recovery of cost.

He added: “We’re hopeful. The hints from ministers have all been very positive.”

Meanwhile, communities secretary Sajid Javid and his ministerial team are understood to be less intent than their predecessors on ensuring 20% of homes built on a site meet the current definition of a ‘starter home’.

The ministerial shift is understood to be in response to concerns that the existing definition of a type of owner-occupied affordable housing eats into the potential to require homes for affordable rent or shared ownership to be included.

The new ministers have repeatedly talked about the need to build homes of a “mix of tenures”.

The Department for Communities & Local Government declined to comment.

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