Latest Public Sector News

19.04.16

Four-year settlements will be unaffected by spring Budget savings, Clark confirms

The government’s four-year financial settlements to local councils will not be affected by the need to make savings in the most recent Budget, Greg Clark has confirmed in response to a letter from Clive Betts MP, chair of the Communities and Local Government (CLG) Committee.

The fate of the settlements, which were offered last year to any councils “that wished to plan ahead with confidence”, was thrown into uncertainty by the funding cuts in the most recent Budget, including a reduction in business rates.

After previous correspondence in which Clark, the communities secretary, confirmed that councils will receive compensation for the business rates’ cuts, Betts wrote to him on 23 March asking for an assurance that the settlements “still hold good” despite the Budget.

Clark, who replied on 11 April, said: “I can confirm that I expect the four-year allocations confirmed in the final settlement on 10 February 2016 to be the amounts presented to Parliament each year, should councils choose to accept the offer.

“It is open to any council to continue to work on a year-by-year basis, but I cannot guarantee future levels of funding for those that prefer not to have a four year settlement.”

He added that settlements beyond 2019-20 will be affected by 100% business rates devolution, into which the CLG Committee is currently carrying out an inquiry.

However, the LGA have warned that the four-year settlements could lead to a ‘U-shaped funding curve’.

(Image c. Dominic Lipinski from PA Wire)

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