By David Williams
26 November 2009
Councils will receive an average 4% increase in their central government formula grant next year, ministers have revealed.
Local government minister Barbara Follett announced today that authorities in England would receive a total of £76.3bn in 2010/11. The grant is the final instalment in a three-year settlement period, established in 2008/09 to give councils freedom to budget for more than a year at a time.
The Department for Communities and Local Government has also set ‘floors’ for minimum grant rises. Councils responsible for education and social services will receive a minimum rise of 1.5%, police authorities will be given an increase of no less than 2.5%, while the floor is 0.5% for fire authorities and district councils.
Follett said that, in return for the above-inflation rise, she expects councils to set the lowest council tax increases for at least 16 years, and warned that the government will again impose caps on authorities imposing excessive increases.
She highlighted the 39% real-terms increase in council grants over the ten years to 2007/08, and said the government has moved £6bn into budgets with no spending strings attached.
‘In the current economic climate, the public expects government to be acting smarter with their money… we and the public also expect councils to play their part and find efficiency savings that make each taxpayer’s pound work as hard as possible.’
Councils welcomed the government’s decision to stick to its three-year settlement despite the extraordinary financial conditions since the beginning of the three-year period, in 2008/09.
Local Government Association chair Margaret Eaton said: ‘The fact that the three-year settlement for formula grant has not been changed does give councils more ability to plan ahead.’
She said authorities were making ‘enormous efforts’ to keep residents’ council tax bills down, and emphasised that local government has already made savings of £3bn between 2004 and 2007.
‘Councils are looking to make even more efficiency savings, but are being held back by the costs of centralised regulation, inspections and bureaucracy,’ she said.
26 November 2009
Councils will receive an average 4% increase in their central government formula grant next year, ministers have revealed.
Local government minister Barbara Follett announced today that authorities in England would receive a total of £76.3bn in 2010/11. The grant is the final instalment in a three-year settlement period, established in 2008/09 to give councils freedom to budget for more than a year at a time.
The Department for Communities and Local Government has also set ‘floors’ for minimum grant rises. Councils responsible for education and social services will receive a minimum rise of 1.5%, police authorities will be given an increase of no less than 2.5%, while the floor is 0.5% for fire authorities and district councils.
Follett said that, in return for the above-inflation rise, she expects councils to set the lowest council tax increases for at least 16 years, and warned that the government will again impose caps on authorities imposing excessive increases.
She highlighted the 39% real-terms increase in council grants over the ten years to 2007/08, and said the government has moved £6bn into budgets with no spending strings attached.
‘In the current economic climate, the public expects government to be acting smarter with their money… we and the public also expect councils to play their part and find efficiency savings that make each taxpayer’s pound work as hard as possible.’
Councils welcomed the government’s decision to stick to its three-year settlement despite the extraordinary financial conditions since the beginning of the three-year period, in 2008/09.
Local Government Association chair Margaret Eaton said: ‘The fact that the three-year settlement for formula grant has not been changed does give councils more ability to plan ahead.’
She said authorities were making ‘enormous efforts’ to keep residents’ council tax bills down, and emphasised that local government has already made savings of £3bn between 2004 and 2007.
‘Councils are looking to make even more efficiency savings, but are being held back by the costs of centralised regulation, inspections and bureaucracy,’ she said.
