By Richard Johnstone | 19 December 2013
A £200m government allocation to allow councils to use money raised from asset sales to improve public services will be distributed on a competitive basis, local government minister Brandon Lewis has said.
Lewis was speaking in the conference call with councillors and officers after the local authority finance settlement yesterday. He said the proposal set out in the Autumn Statement to give town halls flexibility to spend £200m worth of capital receipts on one-off costs of service reforms in both 2015/16 and 2016/17 would be allocated following a competition.
The new flexibility will represent ‘a big move forward’ for local government, he said.
‘We’ll be coming out early in the new year with some details on how this will be implemented. It will be a competitive bid process, but it does give a real big opportunity for authorities to make use of those capital assets in a way that has not been possible before.’
Lewis also called on councils to use their own reserves to reform local services so they can ‘invest now for savings in the future’.
‘It’s very much a matter for local authorities how they spend them and how they use them ¬– different authorities will have different views and plans,’ he said. ‘What I would say genuinely to councillors is to look really closely at how they use those reserves to invest now for savings in the future, whether it’s restructuring, whether it’s innovative investment, whether it’s using capital investment to bring about revenue savings. That’s the kind of thing they should be looking at.’
Also in the conference call with councillors and officers after the statement was published, Lewis accused some finance officers of ‘scaremongering’ about the impact on councils of accepting the government’s council tax freeze grant.
It was announced yesterday that grants for the previous freezes in 2011/12 and 2013/14 will now be included in the funding settlement total for future years, as will funding for the next two years. This comes after some authorities had raised concerns that accepting the freeze would mean they had reduced the size of their council tax base in future years.
‘The reason we’re putting that money fully in the base is to give that reassurance to authorities that are freezing council tax that they don’t have this cliff edge that many section 151 officers have been scaremongering about for a period,’ Lewis said.
