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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READERS’ COMMENTS (2)
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.