Government rejects calls to legislate new burdens doctrine and devolve full control of council tax

The cross-party committee published its report, The Funding and Sustainability of Local Government Finance, in July this year, in which it warned that English councils were being asked to deliver more services than ever but without adequate funding to do so effectively.

Twenty-nine recommendations were made in the report, including a call for the New Burdens doctrine to be reviewed, updated, and put on a “stronger statutory footing”.

The doctrine requires government departments to ensure any new responsibilities for local authorities are fully costed and funded, is a vitally important part of government financing but is not robust enough to prevent unfunded mandates.

Responding to the report on Tuesday (21 October), the Government said the new burdens doctrine “is deliberately designed to be dynamic” and that locking it into legislation “would limit its ability to evolve alongside wider public service reform”.

It added that the doctrine already acts as “a central mechanism for holding departments to account when they introduce new legal duties without local input”.

However, the Government said it was considering a review of the doctrine to consider how to “better account for costs associated with bidding processes and a more efficient way of ensuring councils fully benefit from New Burdens funding by streamlining the payment process”.

Elsewhere, the Government rejected the committee’s recommendation to devolve full control over council tax to local authorities.

It said: “Council tax is already a localised tax – local authorities are responsible for setting tax levels, administering and collecting the tax, and have discretionary powers over discounts, premiums and support for working age people.”

The Government also reiterated its intention to provide “multi-year certainty” by bringing together grants from across departments into “large ringfenced consolidated grants” delivered through the finance settlement.

Ministers meanwhile said they would set out further detail in the autumn on “introducing financial flexibilities to support councils” in response to the committee’s call to reform the section 114 process so that short-term budget pressures do not cause long-term financial distress.

The Government confirmed that its review of local authorities’ statutory duties, announced in July, is expected to continue for around a year, although “where benefits can be delivered sooner than this we will do so”.

This was in response to a committee recommendation that the Government review which local government services should and should not be statutory requirements.

It said that any recommendations will be “comprehensively tested with councils and agreed by relevant government departments”, with any legislative changes introduced “as soon as Parliamentary time allows”.

Elsewhere on funding, the response highlighted that a new outcomes framework for local government will be published alongside the provisional Local Government Finance Settlement for 2026–27.

The framework, which will take effect from April 2026, is intended to support delivery and “take action in response to poor public service outcomes for local people”.

On special educational needs and disabilities (SEND), the response said the Department for Education would set out its approach to reform “in the coming months” through a Schools White Paper.

Announcing the white paper in the Spending Review in June this year, the Government initially said it would be published in the autumn.

The Government acknowledged the pressures local authorities face from rising Dedicated Schools Grant (DSG) deficits, and confirmed plans to extend the DSG statutory override until the end of 2027–28.

It said more detail would be provided “in the coming months”, including on support for councils with both historic and accruing deficits.

The Government also said it would publish further detail this autumn on its approach to the “exceptional financial support” (EFS) framework in an updated support plan.

It also confirmed that a new homelessness strategy will be published later this year as part of a move away from “a system focussed on crisis response” towards one that takes “a holistic approach to preventing homelessness in the first place”.

Adam Carey