DCLG confirms 4% rise for councils

20 Jan 10
Councils will be given a settlement of £76.2bn for the coming financial year, a rise of 4%, the Department for Communities and Local Government has confirmed
By David Williams

20 January 2010

Councils will be given a settlement of £76.2bn for the coming financial year, a rise of 4%, the Department for Communities and Local Government has confirmed.

Local government minister Barbara Follett today announced the finalised figure, which is slightly below the £76.3bn proposed on November 26. Follett repeated her call on authorities to keep their council tax rises as low as possible, and threatened to cap ‘excessive’ increases.

The department revealed that it has already begun action to cap three as yet unnamed police authorities to limit their precept rises to 3%.

This year’s 3% average council tax increase was the lowest since 1994/95, and the minister said she expects next year’s Band D council tax rise to be the lowest in 16 years.

DCLG figures show the government will have increased council funding by £8.6bn over the 2008/09 to 2010/11 Spending Review period. This followed a real-terms increase of 39% in the decade from 1997.

Follett called the 4% increase ‘generous’ and said: ‘As a result of our financial commitment I expect to see councils make decisions that protect frontline services and cut the average council tax increase… many councils are already stepping up and predicting council tax cuts or freezes.’

She also confirmed that the government’s system of ‘grant floors’ would remain in place, meaning no local authority would receive less in 2010/11 than the year before.

The floor is set at 1.5% for top-tier councils, and 0.5% for fire authorities and second-tier councils. The grant floor for police authorities is 2.5%.

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