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Extra cash for welfare funding a partial victory for councils

Upper tier authorities are to receive an additional £74m in the final Local Government Finance Settlement, to assist them in “dealing with pressures on local welfare and health and social care”. 

Local government minister Kris Hopkins made the announcement late yesterday evening and said the extra funding had brought spending power – the government’s preferred calculation, which has been heavily criticised – in 2015-16 down by 1.7% instead of 1.8% as provisionally announced in December

Hopkins added that all councils are still advised to freeze their council tax in 2015-16, and the trigger for a referendum on council tax increases will remain at 2%. 

Other than the additional welfare funding, granted in response to representations made by councils during consultation, the settlement remains unchanged. 

When the provisional settlement was made, the LGA warned that the ending of the £172m Welfare Support Grant, which was technically incorporated it into the Settlement Funding Assessment (SFA) without extra money, was a key concern. 

The Association wrote that the provisional settlement did not reinstate the cut of £172m; instead the government separately identified £129.6m in the SFA in 2015-16 – at the expense of other elements in the SFA. 

In his written statement, Hopkins said: “To assist in identifying how much of their existing funding relates to this, an amount relating to local welfare provision was separately identified in each upper-tier authority’s general grant. This totalled £130m nationally and was distributed in line with local welfare provision funding in 2014 to 2015. 

“The government has always been clear that councils should choose how best to support local welfare needs. Therefore this allocation will not be ring-fenced and we will not be placing any new duties, expectations or monitoring requirements on its use.” 

Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy (CIPFA), said that while some councils, with the extra £74m, will receive some more funds it is unlikely it will meet the challenges that many local authorities face in caring for their most vulnerable citizens. 

The Local Government Association claims that final settlement shows that councils across England will receive 8.5% less funding from government to run local services in April 2015. 

LGA chair Cllr David Sparks said: “Local authorities are now in the process of finalising this year’s budgets. These savings will be the most difficult yet, and it is unavoidable that they will have an impact on local government's ability to improve people's quality of life and support local businesses. 

Responding to government’s announcement of an additional £74m for upper-tier authorities to go towards local welfare and adult social care, Cllr Sparks said: “Government’s original decision to scrap funding for local welfare schemes would have led to the withdrawal of emergency help for people in their times of need. For the past 12 months councils have been urging ministers to reconsider. It is good news for some of the thousands who may need to turn to their council for emergency support that local authorities have been listened to, resulting in some of this vital funding being reinstated. 

“The provision of £74m additional funding will help councils provide a lifeline to some of their most vulnerable residents. However, this still amounts to a reduction of almost £100m  in government funding for local welfare. At a time when councils are tackling the biggest funding cuts in living memory, many areas will struggle to protect their local support scheme from this cut from April. This is also unlikely to have a meaningful impact in alleviating the huge pressures on adult social care.” 

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