Kemi Badenoch has suggested council tax increases may be needed after claiming local authorities face a £2.4 billion “black hole” next year.

The Conservative Party leader used Prime Minister’s Questions to pressure Sir Keir Starmer over the government’s funding plans for city councils in England, including whether the council tax cap would be increased or not.

Prime Minister Sir Keir said Ms Badenoch “wants all the benefits” of the Budget but would not say how she would fund it, before later accusing the Opposition Leader of asking “fancy questions”.

The Conservatives cited responses to written parliamentary questions in which ministers said the estimated basic purchasing power (CSP) for local government would fall from £64.7 billion in 2024/25 to 68.4 billion in 2025/26, with the party adding that the Budget did not provide enough new funding to cover this.

Ministers said the CSP was subject to data changes and final figures would be published as part of the local government financial regulations for 2025-26.

Speaking outside PMQs, Ms Badenoch asked: “Will the Prime Minister confirm that he will maintain the council tax cap?

Sir Keir, in his response, said: “On the question of advice, she knows what the arrangements are. »

Ms Badenoch replied: “I think the House would have heard that the Prime Minister could neither confirm nor deny whether the council tax cap was increased. »

Ms Badenoch then asked how much extra money local authorities will need to raise to cover the “social care funding gap” created by the Chancellor’s Budget and the increase in employers’ national insurance.

Sir Keir, who earlier responded to a question from Liberal Democrat MP Christine Jardine (Edinburgh West) on healthcare funding, replied: “This scam is very good, but not actually listening to this that I said three minutes ago is a little bit ridiculous. fundamental failure of the leader of the opposition.

“I just said £600m. I repeat: £600 million.

Ms Badenoch warned of the risk of rising costs for care providers before Sir Keir accused the Conservatives of leaving local authorities in an “absolutely catastrophic state”.

The Conservative leader later said: “The Prime Minister probably doesn’t realize that on Monday the Department for Communities, Local Government and Housing revealed that councils will have to find an extra £2.4 billion in taxes housing next year. That’s well over £600 million.

“I know he was absent, but has the Deputy Prime Minister (Angela Rayner) who runs this department made him aware of their £2.4 billion black hole?”

Sir Keir replied: “Let me be clear, she doesn’t want any of the measures in the Budget, but she wants all the benefits.

“So the magic money tree is back after two weeks in office. They learned absolutely nothing. We have presented a Budget that makes tough decisions, repairing the £22 billion black hole they left and investing in the future of our country.

“They say they want all this, but they don’t know how they’re going to pay for it – the same old conservatives.”

Ms Badenoch accused the Government of “manipulating the tax rules” before highlighting how increasing National Employer Insurance would be a “disaster” for small businesses.

The opposition leader later said: “Their ideological budget was designed to exploit the private sector and hope that no one will notice.

“Now his ministers are all lining up for a public sector bailout to fix his fiscal mess. If he wants to bail out the public sector, can he tell us this: does he think it is appropriate – as the Ministry of Housing has done – to approve a four-day week for municipalities which is not flexible work, but is actually part-time work for a full-time salary?

Sir Keir replied: “Questions based on what we actually do are usually better than made-up fancy questions.

“What have they delivered in 14 years? Low growth, a stagnant economy, a disastrous mini-budget, a £22 billion black hole and now she wants to give me advice on running the economy?

“I don’t mean to be rude but no thanks, very much.”

Last week the Government dropped its official concerns over South Cambridgeshire District Council’s four-day week after the authority faced opposition from the previous Conservative administration.

Speaking after PMQs on the council tax cap, the Prime Minister’s press secretary told reporters: “The threshold remains the same.”