Cosla fury over 11% grant announcement

13 Dec 01
The Scottish Executive has been accused of 'massaging figures' after it announced an 11% grant increase for local authorities.

14 December 2001

The Convention of Scottish Local Authorities reacted furiously, claiming that ministers were using headline figures to 'camouflage the realities of another difficult settlement'.

Announcing the package on December 6, Andy Kerr, Minister for Finance and Public Services, said councils would receive an extra £350m in 2002/03, bringing total revenue support grant to £6.7bn. 'Investment on this scale… demonstrates our commitment to providing better public services and to the continuing vital role local government plays in delivering these services,' he said.

Cosla's director of finance, Norie Williamson, accused Kerr of 'talking up the figures'. He said the extra £350m was not, in fact, new money but a 'redirection of payments' that had already been announced.

Williamson said the figure included £137m in grants for pre-school education that was 'added back into the settlement', increased resources for new services, such as £125m for elderly care, and £73m transferred from the Department for Work and Pensions for residential home payments. It also includes extra resources to fund teachers' pay that had been announced in the 2000 Spending Review.

According to Cosla's analysis the real underlying increase in Aggregate External Finance for 2002/03 is 3.6%, which will lead to a shortfall of £130m in funding. Specific grants will also increase by 5.3%.

A row is also brewing between English district councils and the government over last week's finance settlement. While authorities will receive an average increase in grant of 5%, districts are in line for an average of just 2.1%, with many reporting substantial losses under the system of floors and ceilings. Tandridge District Council estimates that it will lose around £351,000 from its £500,000 annual budget.


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