18.12.13
Council spending settlement – ‘government is starting to listen’
The local government settlement for 2014-15 will see councils dealing with an average cut to spending power equating to 2.9% per household (£2,089), local government secretary Eric Pickles has announced.
The provisional settlement will offer local authorities: £22.6bn settlement funding assessment (including £10.1bn of locally retained business rates); £20.2bn in council tax; £1.1m for NHS funding to support social care; £916m via New Homes Bonus; and £235m for the 2014-15 council tax freeze grant
Rural councils will also see an increased grant of £9.5m to drive efficiency.
The DCLG has urged councils to increase merging of back office services, joint working with other local authorities, tackle fraud and use their surplus property assets to further improve their operational efficiency.
Pickles said: “Every bit of the public sector needs to do their bit to pay off the budget deficit, including local government which accounts for a quarter of all public spending. This year, councils should continue to focus on cutting waste and making sensible savings to protect frontline services and keep council tax down. Extra funding is on offer to councils to freeze council tax for a fourth year in a row.
“Opinion polling suggests that satisfaction with local government is either constant or improved compared to 2010, helped by the fact that council tax bills have been cut by 10% in real terms. This is in contrast to the last administration when council tax bills more than doubled and went through the roof.
“The coalition government has tried to be fair to every part of the country – north and south, rural and urban, metropolitan and shire. Unlike the old funding system which encouraged councils to talk down their local areas to win more funding, the decentralisation of local government finance now puts councils in the driving seat, rewarding them for supporting local enterprise, building more homes and backing local jobs.”
LGA chairman Sir Merrick Cockell said: “Today's settlement confirms that councils will continue to be at the sharp end of public sector spending cuts up to 2016, but that Government has started to listen to local authorities and made some important concessions without which local services would have suffered.
“The money Government gives to councils to run local services will fall by 8.5% over the next two years, but as a result of the Autumn Statement there will not be an additional reduction on top of this.
“At a time when local authorities are contending with the biggest cuts in living memory, the introduction of the Better Care Fund and Government's decision to reverse potentially costly changes to the New Homes Bonus will help the efforts of some local authorities in protecting vital everyday services like caring for the elderly from the worst impact of spending cuts.
“The next two years will be the toughest yet for people who use and rely on the vital everyday local services that councils provide. By the end of this Parliament, local government will have to have made £20bn worth of savings. Councils have so far largely restricted the impact of the cuts on their residents. They have worked hard to save those services that people most value and have protected spending on social care for children and the elderly, but even these areas are now facing reductions. That impact will only increase over the next two years.”
Sir Merrick also called for the current centralised model to be replaced with a “better and fairer” way of funding local authorities. He added that leaving the publication of the settlement this late “prevents local authorities from being able to properly consult with residents and deprives local areas of the long-term certainty needed to run important local services to a high standard. No business would be run in this way.”
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Image c. DCLG