19 July 2002
The announcement means that average funding for councils will remain largely static over the next three years, with the government likely to rely on ring-fenced grants and private finance to boost spending. Individual authorities received an average increase of 4% in 2002/03.
High-performing authorities will be able to dip into a £635m reward fund for meeting targets under Local Public Service Agreements – although they are only allowed an extra 2% of their budget.
The Neighbourhood Renewal Fund, traditionally used to boost northern authorities' finances and aid deprived communities, receives a moderate boost. The fund will increase from £300m this year to £400m in 2003/04, £450m in 2004/05 and £525m in 2005/06.
Capital investment in local services will increase by 10.7% over three years, but this does include private cash under the Private Finance Initiative.
The settlement for councils was met with derision from Unison, currently leading a strike campaign over pay. 'Local government cannot survive on scraps from the Spending Review,' said Dave Prentis, the union's general secretary.
The regions, the other part of Deputy Prime Minister John Prescott's empire, fared better. Regional Development Agencies will receive an extra £910m over three years, taking their total spending to £2bn by 2005/06.
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