Ribble Valley Council’s new financial package for public services from the government could be better than expected – but still a smaller rise than other councils.

As budget-setting approaches for the new financial year, the council could be £826,000 better-off in the next 12 months for services. But the increase as a percentage is less than other areas, councillors are being told.

But a government scheme which financially rewards councils for new homes looks set to continue.

Nationally, council funding from central government has changed over the years. This has generally led to greater reliance on council tax, business rates, fees and charges, special grants along with searches for new, regular income.

Ribble Valley Council’s finances are influenced by many factors including core government funding for services, special projects such as UK Shared Prosperity, and the government’s New Homes Bonus. This is a grant incentive  linked to new home building, conversions and bringing empty buildings back into use.

The number of new homes built in the Ribble Valley, the significance of the bonus on council finances and uncertainty over the scheme’s future have been talking-points at some council meetings.

Separately, recent headlines have highlighted extra Westminster government cash for council services this coming year. However, much of it is earmarked for adult and children’s social care, often linked to county councils. Ribble Valley Council will not see any funding rise on such a scale as the headlines have suggested, according to a report for a special budget meeting.

Regarding the government’s annual deal, a council reports states: “The Secretary of State for the Department for Levelling-Up, Housing and Communities published a provisional local government grant settlement in December. Consultation ended in January and the final settlement will be published soon.

“The key headline is that the government states it has provided a 6.5 per cent increase in core spending power [for council services] nationally, with an increase in local government funding from £60 billion to £64 billion.

“It must be noted of the £4billion being made available, £2billion is additional funding and £1billion of this is directed towards children’s and adult social care. Therefore, Ribble Valley does not see an increase of this scale.”

The government assumes Ribble Valley Council will increase council tax by the maximum amount possible, £5 on a band D charge. So the council’s ‘core spending power’ will be £7.4million.  Core spending power is the government’s measurement of a council’s budget for services.

This will be a 4.7per cent increase on the current year, which is significantly less than the overall increase of 6.5 per cent. Overall, other districts have seen a 4.9 per cent increase, the report adds.

The government’s provisional grant settlement indicates Ribble Valley Council will be £826,000 better-off than it predicted. This is largely due to the government continuing with another round of New Homes Bonus allocations next year and a one-off funding guarantee.

On business rates paid by firms, Ribble Valley Council has been told a Lancashire councils shared system will continue in 2024-25, which brings some benefits and is good news, the report adds.

Nationally, government-set business rates have been  debated for years. Issues include decision-making on rates, which were typically collected by councils but then sent to the government for redistribution. But some changes have been introduced

Also business rates are calculated using a ‘multiplier’ system and a business property’s rateable value’ assessed by the government Valuation Office Agency. Critics say this is outdated and fails to reflect huge changes in town centre economies and shop, office and commercial building values.

The small business rate multiplier will be frozen at 49.9p. The standard multiplier will change in April from 51.2p to 54.6p, it is expected.