05 December 2003
Eric Pickles, the shadow local government secretary, has described this year's council finance settlement as a 'dog's breakfast' and warned that 'serious funding problems' would hamper new education and licensing requirements across the sector.
Speaking at a Local Government Association conference on last week's settlement, which gave councils in England and Wales an average 4.7% increase in central government cash, Pickles also warned that passporting had replaced ring-fencing as the most unpopular method of restricting council spending activities.
According to local government minister Nick Raynsford, ring-fencing is the requirement to spend all the cash allocated by Whitehall on the purpose for which it was calculated.
Passporting is the requirement to spend on a particular service all cash increases calculated for that service, including a percentage of local tax receipts.
Speaking in London on November 28, Pickles claimed Labour's requirement to passport 100% of education cash during 2004/05, to prevent a repeat of this year's funding crisis, meant that many authorities would have nothing left from their central government cash to fund other vital services.
With the government insisting on single-figure council tax rises for 2004/05, and warning that 'rogue' authorities would be capped, Pickles said: 'This will result in cuts – it is equivalent to bayoneting the wounded
after last year's debacle.'
Councillors and finance officers in the audience said they were most concerned by the new education passporting requirement and the government's decision to increase the burden of licensing activities administered by councils from next year.
The cost of the latter has not yet been fully assessed, but many authorities claim they will not be able to afford the changes, despite assurances from Raynsford that it 'will not be an unfunded burden'.
Challenged by the audience to indicate where cuts in services were most likely, Pickles said they would be 'at the edge of council activities – those not protected, such as social services, road and street maintenance'.
Earlier, Raynsford defended the 2004/05 settlement. He sympathised with councillors' concerns – describing the 4.7% average rise as 'the tightest settlement in years' – but reiterated that cuts would not be necessary if councils drove through cost-saving initiatives, such as e-government services.
'Local government spends over £40bn each year, and we've got to look harder at what can be achieved with that high level of spend,' he said.
PFdec2003
