26 July 2002
The department has already begun to measure proposed and existing grants from other departments to determine if they are necessary. It expects to publish a paper in October setting out the levels councils can expect over the next Spending Review period.
But it will face an uphill struggle against departments, such as health and education and skills, which use this form of funding to ensure councils meet their policy priorities.
Bob Linnard, director of the ODPM's local government finance directorate, said there were some strong cases for using ringfenced grants. 'But they will all be tested against specific criteria, grant by grant,' he said.
The ODPM does not have power of veto over the grants. A spokesman for the ODPM told Public Finance: 'We will discuss the level of ringfencing that will be allowed with other departments and will come to a collective view through negotiations.'
The department has already pledged substantially to reduce ringfencing, which shot up to 15.3% of total spending in this year's funding settlement. In the Spending Review, it was announced that £2bn would be given back directly to councils, but not until 2005/06.
The news was broadly welcomed by local authorities. But Neil Kinghan, director of economic and environmental policy at the Local Government Association, warned that 'little was likely to change by next year'.
PFjul2002
