Average council cuts will be 1.3% not 1.7%, ministers confirm

4 Feb 13
Town hall cuts for 2013/14 will be smaller than forecast, according to the latest government figures.
By Richard Johnstone | 4 February 2013

Town hall cuts for 2013/14 will be smaller than forecast, according to the latest government figures.

The Department for Communities and Local Government said today that the Local Government Finance Settlement would reduce council spending power by an average of 1.3%, less than the 1.7% predicted by Local Government Secretary Eric Pickles last year.

Local government minister Brandon Lewis said this was due to the inclusion of the final public health grant figures, which were confirmed on January 10. The £5.5bn two-year public health deal was almost 20% more than originally proposed, according to ministers.

Lewis said the DCLG had received almost 200 responses from local authorities and others since the settlement plans were published for consultation on December 19.

However, the government had ‘broadly’ stuck to its plans, he said. ‘Councils account for around a quarter of all public expenditure. Last year [they] budgeted to spend £114bn – a bigger budget than the NHS, twice the entire defence budget or more than double the debt interest. It is only right that they play their part in driving down the deficit left us by the last Labour government.

‘All councils have considerable total spending power. The overall reduction in spending power next year, taking into account the new public health grant, is just 1.3%.’

No council will have its spending power cut by more than 8.8%, he said. ‘Despite the huge pressures on public finances, the government has presented local government with a good deal in 2013/14.’

The settlement also implements the Autumn Statement commitment that local government would be exempt from the 1% being top-sliced from department funding in the next financial year, he added. ‘This important protection gives local authorities time to drive through further service redesign that will deliver the efficient and sustainable services that citizens expect.’

Lewis added that the part-localisation of business rates from April would bring ‘a dramatic shift in spending power from Whitehall to the town hall’, meaning that around 70% of council income would be raised locally.

Rural local authorities would also have access to additional funding based on their sparsity, to reflect the costs of delivering some services, he added. This included a £8.5m transitional grant for 2013/14 to help rural authorities find efficiencies in services.

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