Final local government finance settlement brings £74m for care and welfare

4 Feb 15

Ministers have confirmed the 2015/16 local government finance settlement, delivering a further £74m to upper-tier authorities for additional support with social care and welfare needs.

In a written statement laid before Parliament yesterday, local government minister Kris Hopkins confirmed the proposals for the 2015/16 settlement announced provisionally in December, including a 2% council tax referendum principle.

‘With the addition of the extra resources… the overall change in local authorities’ spending power in 2015 to 2016 is now -1.7%. When taking into account the funds that we are providing to support local transformation, the overall final reduction is even lower – at 1.5%,’ Hopkins said.

‘Councils facing the highest demand for services continue to receive substantially more funding and we are continuing to ensure that no council will face a loss of more than 6.4% in their spending power in 2015 to 2016 – the lowest level in this Parliament.’

The minister said the additional £74m for upper-tier authorities had been allocated in response to representations made during the consultation period. He said it came on top of £37m announced last week to help councils provide support packages to for people preparing to go home after a stay in hospital as well as prevention work.

Funding has also been provided to freeze the council tax and this freeze grant will be consolidated into councils’ baseline funding, Hopkins confirmed.

Commenting on the final settlement, CIPFA chief executive Rob Whiteman said:‘While it is welcome that DCLG have listened to local authorities concerns and allocated some more funds to support social care provision it is unlikely that £74m will be enough to meet the challenges that many councils are facing in caring for their most vulnerable citizens.

‘This is especially true with the coming implementation of the Care Act which is expected to leave authorities with significant new financial burdens.’

Whiteman added that ministers’ continued use of the term ‘spending power’ was ‘highly questionable’ and misinforms the public and the level of cuts being imposed on councils.

‘If the public are to trust government announcements we urgently need a more open and honest presentation of the financial challenges facing local authorities rather than the disingenuous under-reporting of the reductions in funding being placed upon local authorities by central government,’ he said.

The Local Government Association said the settlement would mean councils will receive 8.5% less funding to spend on services.

‘Local authorities are now in the process of finalising this year’s budgets. These savings will be the most difficult yet, and it is unavoidable that they will have an impact on local government's ability to improve people's quality of life and support local businesses,’ said LGA chair David Sparks.

‘We must not forget that it is individuals who have paid the price of funding reductions, whether it is through seeing their local library close, roads deteriorate or support for young people and families scaled back. These local services need to be adequately funded in the next parliament if they are going to survive the next few years.’

He added that the £74m for local welfare schemes was still more than £100m less than the funding provided in 2014/15.

SIGOMA treasurer Frances Foster said: ‘Even with a little more money for the Revenue Support Grant, the final settlement still contains larger budget cuts for those authorities protecting the most vulnerable. With bigger proportions of the cuts year after year, we are anxious how much longer SIGOMA authorities will be able to cope.’

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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