29 October 2004
The Local Government Association is preparing to slash funding to its central bodies by 4.1% next year in advance of what is expected to be a tight finance settlement in November.
As Public Finance went to press, the LGA executive was due to approve the cuts to the budgets of the top-slice funded organisations at a meeting on October 28.
Four of the five bodies — the Improvement and Development Agency, the Employers' Organisation, the 4Ps, Local Authorities Co-ordinators of Regulatory Services and the Local Government International Bureau — will see real-terms cuts.
Total top-slice funding will fall by 1.6%, from £43.2m in the current financial year to £42.5m in 2005/05, a real-terms fall of 4.1%.
The IDA will be the worst affected, having its budget cut by 3.3% to £21.1m. The 4Ps and Lacors will have their budgets frozen.
The EO, whose future as a organisation separate from the LGA is still being considered, will receive a small increase of 0.7% to its budget.
In contrast, the LGIB's budget will be boosted by 8.5% to £1.8m as part of the drive to be more active in relation to the European Union.
In addition, the LGA executive will formally refuse a bid from the Local Government Ombudsman for an increase of almost 10% in its 2005/06 budget.
Sarah Wood, the LGA's director of economic and environmental policy, told PF that in a difficult financial climate the organisation was leading by example.
'At a time when local authorities are under real pressure it would be inappropriate for the LGA, which is funded by members, not to get its own house in order,' she said.
The body is also embarking upon a major cost-cutting drive over the next year. It has made a new appointment, at director level, to oversee the merger of support services such as IT, finance and human resources across all the central bodies.
Jonathan Tross, who is taking up his post shortly, has been given an 18-month contract to oversee the project. In addition, Wood will assume control of the health and social services directorate for the next six months, while its current director, John Ransford, will become acting director of strategy.
PFoct2004
