Tag Archives: funding cuts

Another government minister playing mind games with local government

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All junior pupils to be enrolled in a libraryEvery junior school student in the country will be enrolled in a local library, Nicky Morgan will pledge today. The Education Secretary said it is a “national mission” to improve literacy levels of young children. Officials in the education department hope that the drive could stop closures of libraries across the country. Local authorities often close libraries and justify their decision by saying that there are not enough members to warrant continued funding.

So, Nicky Morgan is going to make it a “national mission” is she?  Is she also going to make it a nationally funded mission, so that councils aren’t forced to cut other services just to satisfy yet another piece of government double speak?  I can answer that question, without even bothering to ask the minister.  There’ll be no financial support forthcoming, just more weasel words from ministers, when councils cry foul.

Gary Porter wants to be a unifying force in local government

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LGA cannot afford to sit on the fence over distribution of funding

25 June, 2015 | By Sarah Calkin

The incoming chair of the Local Government Association has pledged to avoid sitting “on the fence”, despite having to represent the interests of members from across the political spectrum

Gary Porter (Con) told LGC he would find ways for the association to present a united front on difficult issues, such as how funding should be distributed across local government.

Under the current finance regime, councils in the most deprived areas have suffered some of the largest cuts compared with authorities in relatively wealth areas.  “If anything happens in this year it won’t be because we’ve got splinters,” he said. “We cannot afford to sit on the fence because then we’ll have the whole world designed against us.”

Asked whether the LGA would advocate a return to a means of funding distribution which was more based on need, Cllr Porter said it was not the only valid way of distributing funding.  The funding regime should, however, become “more sophisticated”.  “Needs based on poverty alone generally miss some parts of the country where there is real poverty masked by a general economic wellbeing,” he said.

He added that Labour councils should be confident he would represent their interests as he was not “a tribal politician”.  “In some of the things I do I’m probably more left wing than some of the Labour councils: I bought the dustbins back in-house, grounds maintenance back in-house, kept my council houses.”

Crisis leads to council tax referendum call

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30 May, 2013 | By Mark Smulian

Herefordshire Council could become the first to hold a council tax increase referendum after an emergency meeting over a budget crisis.

This followed a review by incoming chief executive Alastair Neill, which found the budget set only in February contained errors and weaknesses.

It must now save an extra £8.4m this year and make 290 job cuts, against some 120 originally intended.

The council has saved some £21.1m over the last two years, and must save a further £32.2m over this year and the next two.

Mr Neill’s review found areas in the February budget “where the plans were not sufficiently resilient and [where] additional savings need to be made to ensure that the council delivers its plan within its budget”.

This included £1m of procurement savings which had “slipped and needed to be tackled” and £3.8m of learning disabilities grant which had in effect been counted twice.

Tony Johnson (Con), the council’s new leader, said: “We are facing a very challenging time over the next few years and as such we need to consider alternative approaches to delivering some of our services.

“Inevitably, non-mandatory services must bear the brunt of the cuts and although this will unfortunately involve job losses, it does not automatically mean the loss of services.”

The extraordinary council meeting agreed that the cabinet would consider holding a referendum to increase the 2014-15 council tax above whatever cap level is imposed.

Some 25% of Herefordshire’s income comes from council tax, which it had frozen from 2011-13. It increased it this year by 1.9%, equivalent to £1.5m.

Cllr Johnson said: “We must consider the possibility of raising council tax responsibly and proportionately across the county, as we begin to consider next year’s budget.”

Before doing so, he wanted to gauge whether residents “would be prepared to vote in favour of raising taxes to protect the county’s vital services”.

The coalition dropped Labour’s council tax cap, but substituted a system where tax could be raised above a nationally defined level only following a local referendum.

No council has yet held such a referendum, fearing both the cost and the likely outcome. In Herefordshire’s case a referendum would cost £100,000 to conduct.

In a joint statement with Unison, Herefordshire said it had agreed to reduce from three to two the number of days of unpaid leave to be taken during the Christmas period and to increase redundancy terms from the statutory minimum to 1.5 times that level.

Unison would prefer to keep in-house provision but will engage “fully in consideration of alternative business models that may be required in areas of service, where the council has to reduce or withdraw funding”.

(Some) Districts given thumbs up for tax rises of up to 8%

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Districts given thumbs up for tax rises of up to 8%
2 January, 2013 | By Ruth Keeling

“Low cost” district councils who have been granted leeway over council tax next year could increase rates by up to 8% without holding a referendum.

LGC has identified the 50 district councils that are set to benefit from the extra flexibility over council tax setting announced in last month’s local government settlement.

Under the proposals set out by local government minister Brandon Lewis, districts within the lowest quartile of council tax rates in 2012-13 will be able to increase tax above 2% without a public vote as long as the increase is not more than £5 in cash terms.

There are 50 district councils in the ‘lowest quartile’ with average Band D council tax rates below £142. They include Breckland BC which has the lowest council tax rate in the country at £65 and where an extra £5 equates to an 8% increase, as well as West Oxfordshire DC and Hambleton DC, where a £5 rise is a 6% increase.

Mr Lewis, speaking to councillors during a Q&A the day after the announcement, said it was only fair that “low cost” authorities be granted some additional flexibility. However, he said it was not clear the same flexibility would be offered after 2013-14.

The potential rises available to each of the 50 councils is listed below. There is no indication yet that any of the councils in question plan to take advantage of the extra flexibility available to them.

Council Maximum increase without a referendum (£5)
Breckland 8%
West Oxfordshire 6%
Hambleton 6%
South Staffordshire 5%
Tewkesbury 5%
Basingstoke & Deane 5%
North Dorset 5%
Wychavon 5%
Hinckley & Bosworth 4%
East Lindsey 4%
Broxbourne 4%
Broadland 4%
South Cambridgeshire 4%
Vale of White Horse 4%
South Oxfordshire 4%
East Devon 4%
King’s Lynn & West Norfolk 4%
Cherwell 4%
East Northamptonshire 4%
West Dorset 4%
Exeter 4%
Charnwood 4%
Stratford-on-Avon 4%
Test Valley 4%
Huntingdonshire 4%
Wellingborough 4%
Sedgemoor 4%
Rushcliffe 4%
Malvern Hills 4%
South Norfolk 4%
West Somerset 4%
Wycombe 4%
Chichester 4%
Eastleigh 4%
Daventry 4%
East Hampshire 4%
South Kesteven 4%
Taunton Deane 4%
Runnymede 4%
Forest Heath 4%
Blaby 4%
South Hams 4%
North Norfolk 4%
East Cambridgeshire 4%
North Kesteven 4%
Chesterfield 4%
Horsham 4%
Fareham 4%
Ashford 4%
Ribble Valley 4%

Local government funding cuts – the truth?

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Hardest hit face cuts of 15% next year
2 January, 2013 | By Ruth Keeling

Cuts to some councils’ core grant allocations could be as high as 15% next year – potentially rising to almost 40% by 2014-15 according to LGC analysis of data on the local government finance settlement.

Figures for councils’ individual ‘start-up funding assessment’ – which provides a measure of their main basic revenue streams – show an average cut of 4% next year and 9% in 2014-15.

The settlement – announced by ministers on 19 December – saw ministers focus on their preferred measure of councils’ ‘spending power’ which includes a wide range of service-specific grants and an estimate of council tax revenues and showed an average reduction of 1.7% last year.

But a detailed breakdown of each council’s individual allocation was not published until Friday the 21st – literally hours before the end of the last working day before the Christmas break.

LGC’s analysis of these figures show some authorities face cuts to their ‘start-up funding assessment’ as high as 15% next year. With cuts in 2014-15 set to be even more severe, the sector faces an average reduction of 12% over the second half of the spending review, with hardest-hit council potentially facing cuts of as much as 39%.

The start-up funding assessment measure does not take into account payments made under the New Homes Bonus, which stands to substantially benefit many district councils. Furthermore, figures for revenue streams in 2014-15 are no more than predictions as the new system of retained business rates will by then be in effect.

Those worst affected by the cuts have been offered a transition grant in 2013-14, re-badged as an “efficiency support grant” – designed to limit cuts in spending power to 8.8% but which has the effect of limiting cuts in start-up funding assessment to 15% in the first year. However, the efficiency grant is not assured in the second year and depends on whether councils make certain improvements to the way they deliver services.

Without the grant the worst hit – Great Yarmouth BC, which pulled out of a shared management arrangement following last May’s elections – will face cuts of 28% in 2014-15, creating a cumulative reduction of 39% over the two final years of the spending review period. But even councils not eligible to receive the emergency grant could be facing cumulative cuts of potentially 25%.

The table below shows authorities not cushioned by the efficiency grant will face reductions in their start-up funding assessment figure in excess of 20% over the next two years. Authorities eligible for the efficiency grant are marked with an asterisk.

Council 2013-14 % change Cumulative % change 2013-14 to 2014-15
Great Yarmouth* -15% -39%
Burnley*. -15% -38%
Barrow-in-Furness* -14% -36%
Bolsover*. -14% -35%
Hyndburn* -13% -34%
Pendle*. -15% -33%
Hastings* -15% -33%
Chesterfield -14% -25%
Preston -13% -24%
Copeland -10% -21%

‘Start-up funding’ v ‘spending power’

The new ‘start-up funding assessment’ refers to a local authority’s share of the spending control total. This SUFA figure is made up of two parts: an authority’s revenue support grant in that year and the baseline funding level as set for the start of the business rate retention funding system.

‘Spending power’ includes the start-up funding assessment and 13 other council revenue streams ranging from those affecting very few authorities, such as funding for fish conservation authorities, to more widespread items such as council tax requirement, social care funding and New Homes Bonus.

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