True scale of settlement cuts emerges

Copied from Local Government Chronicle online
20 December, 2012 | By Dan Drillsma-Milgrom

Councils face much higher funding cuts than those announced by communities secretary Eric Pickles, fresh analysis of the local government settlement has revealed.

An LGA briefing on the settlement said council funding would be cut by almost 4% next year and 9% the year after.

The cuts in core government funding for councils stands in contrast to communities secretary Eric Pickles’ claims that local authorities’ ‘spending power’ would reduce by only 1.7% next year.

LGA chairman Sir Merrick Cockell (Con) said the figures showed that local government continued “to bear the brunt of public spending cuts in the spending review period”.

The LGA’s calculations showed that councils’ start-up funding allocation in the new retained business rate funding system would decrease on a like-for-like basis of 3.9% in 2013-14. The following year, while councils’ local share of retained business rates is projected to grow by 3.1%, the revenue support grant which still makes up the bulk of councils’ funding is forecast to fall by 17%. The net effect is for a projected 8.6% decrease in funding.

Sir Merrick claimed that local government’s cuts in the spending review period would now exceed 33%, in comparison to the 28% originally announced.

The briefing also confirmed a number of details from the settlement announcement:

Of the £661m being paid to councils through the New Homes Bonus, £411m would be top-sliced from councils’ formula funding in 2013-14.
The amount held back to fund the safety net has been reduced from £245m to £25m
Twenty areas have been designated as pools for the purposes of top-ups, tariffs and safety net payments. These are: Berkshire; Greater Birmingham & Solihull; Buckinghamshire; Coventry & Warwickshire; Cambridgeshire; Devon; Gloucestershire; Leeds City Region; Leicester & Leicestershire; Lincolnshire; Greater Manchester; Norfolk CC and Broadland; Northamptonshire; Nottinghamshire; Oxfordshire; Somerset; Staffordshire & Stoke-on-Trent; Suffolk; Surrey; Worcestershire

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Graham669 | 20-Dec-2012 2:40 pm
Pickled is doing his usual act of stupidity, the secondary effects of the crazy cuts in LA funding will last far longer than he is in office.
This charlatan will unfortunately leave a legacy of social damage that will take decades to heal.

patrick newman | 20-Dec-2012 4:04 pm
As predicted we only find out the truth well after Pickles has spoken but I doubt if cares too much about that. A further round of redundancies is inevitable thus putting more pressure on state finances through increased benefits and reduced tax yield. There must be many councillors who feel unhappy about being Pickles’ neighbourhood axemen.

2 thoughts on “True scale of settlement cuts emerges

  1. South Holland District Council (SHDC) actually, it would appear, (difficult to really say) received an increase in funding of 0.3%, not enough to cover inflation but at least funding was not reduced.

    The trend though is clear: it’s death by a thousand cuts for the smaller, less efficient district and borough authorities. Continued reduced funding is inevitable caused by increasing national government deficits. There is a growing consensus that local authorities/boroughs will be forced to merge in to a larger (unitary) county council in order to make further cost saving efficiencies (by scale).

    The days of the district council and councillors local government administrative local model would appear to be numbered. It’s just too expensive and questionably efficient. Ultimately it’s likely that your county councillor will be your district representative. Local services (waste, licensing and benefits etc.) will be eventually administered from Lincoln, much like health, highways education etc., is now. Is this such a bad thing? Presumably there would still be local depots/offices for each of these administrative categories much as there is now. It would certainly remove much of the duplication of effort that currently exists.

    Some UK local authorities have had to downsize so much to save money, that a chief executive post is deemed to be an expensive luxury that can no longer be justified. What remains of the ceo role is delegated to a senior management committee. SHDC is in that same category; however, SHDC has chosen to go the ‘shared management’ route where the CEO and the executive team spend much of their time commuting between distant local authority locations – hardly ideal.

    SHDC and all Lincolnshire local authorities should recognise the reality that it is only a matter of time before the cost of running even a ‘shared services; shared management’ local authority can no longer be justified and that some kind of county unitary administration is the logical route to go.


    • Agreed on the need to construct local government in a much more efficient way. Also agree that the 2 tier poorly serves the taxpayers by offering them a confusing system through which to access services. However, I am not sure that this government is not committed to ensuring that local government becomes an efficient machine, capable of challenging the worse excesses of central government. One of the first things they did when they took control was to cancel the move to unitary in the Norwich area. South Somerset DC has been looking at merging with a neighbour, due to their concerns about viability and yet the minister is attempting to steer them in the direction of total outsourcing – a virtual council populated by contract writers and overseers and of course bean counters. Where democracy comes in to it I’m not sure. Perhaps it will be a simple consultation exercise, with the public being involved only at the outset and when significant changes are needed. As such, parish and town councils will be used as the only way the interests of local people will be represented. These in turn will be restricted to being very much a parochial and inward looking arrangement.
      I’m unsure that any Lincolnshire wide unitary, run from Lincoln, will best serve our taxpayers. County councillors seem to expend a large amount of time and money simply travelling backwards and forwards. A one hour meeting in Lincoln takes 4 hours of a South Holland councillor’s time to attend.


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