Ministers tweak local government finance settlement
Author: Lucy Phillips, Public Finance |
The local government finance settlement was finalised today, with the upper limit for cuts to local authority revenue spending power adjusted down from 8.9% to 8.8%.
Councils will now face a maximum reduction in spending power of 8.8% in 2011/12, although the average cut remains the same as set out in November’s provisional settlement at 4.4%.
Shire districts will also receive an extra £10m to compensate for the loss of concessionary bus travel funding, ministers said.
The government said it had consulted widely and listened to the concerns of the Local Government Association, London Councils and many individual authorities since December 13.
Today’s settlement allocates a total revenue grant of £72.7bn to councils for 2011/12. It also distributes £29.4bn in formula grant for 2011/12 and £27.1bn for 2012/13.
Ministers claimed the final arrangements were ‘fair and progressive’ since they directed money to where it was most needed while also protecting taxpayers. The government used the same words to describe the provisional statement, which was widely disputed.
Local Government Secretary Eric Pickles said today’s settlement ‘goes hand in hand with the new localism powers and spending freedoms we are handing councils so they can be as efficient and effective as possible with public funds, rooting out waste and focusing on frontline public services’.
Local government minister Bob Neill added that councils had a ‘big part to play’ in reducing the country’s public spending.
The Local Government Association said the settlement remained the ‘toughest in living memory’ and accused the government of ignoring its advice to spread the cuts more evenly over the four-year period.
LGA vice chair Richard Kemp said: ‘The speed and depth of the cuts mean that conventional efficiency drives, such as shared services, will fall well short of delivering the kind of savings needed to protect all the services councils provide. Inevitably councils face extremely tough decisions on which services to save and which to cut.’
The extra £10m of concessionary fare funding went only a ‘small way’ to plugging the funding gap for district councils, he added.
The Home Office also today announced a 25% reduction in local authority funding for Community Safety Partnerships.
Kemp said the cuts endangered a vital service, which aims to combat crimes such as antisocial behaviour, domestic violence, graffiti and substance misuse.
‘Councils have been waiting since December to hear about this part of the settlement, and the delay has made planning for the future extremely difficult,’ he added.