PDF version
http://www.londoncouncils.gov.uk/news/current/pressdetail.htm?pk=1237
Mon, 13/12/2010 - 5:18pm
Despite the huge pressures on public finances, the Coalition Government has taken unprecedented steps to protect councils most reliant on central government funding and freeze council tax, Local Government Secretary Eric Pickles said today.
Today the provisional details of the funding settlement for councils in England for 2011-12 and 2012-13 were published. Reductions to council spending reflect the urgent need for the public sector to help put the country's finances back in order, keep interest rates down and prevent national debt escalating to £1.4 trillion of taxpayers' money.
Ministers have taken a progressive and fair approach to calculating how the £29 billion of central taxpayer funding for local government grants this year will be allocated. More money is being channelled at those areas of the country that have the highest levels of need. A plain English guide to today's Finance Settlement is also being published to cut through Whitehall jargon, this is available here www.communities.gov.uk/documents/localgovernment/pdf/1796186.pdf.
Ministers are clear that the settlement represents a fair deal that will enable councils to protect the front-line services people rely on, shield the most vulnerable places, safeguard the most vulnerable people, and protect taxpayers' interests. The Government has:
- Given more weight to those parts of the country with the highest levels of need. For example, funding per head for residents in Hackney in 2011-12 will be £1043 compared with £125 per head in Wokingham.
- Ensured that the settlement is fair between different parts of the country - north and south, rural and urban, metropolitan and shire. Formula grant is being directed to where it is needed most.
- Sought to insulate those areas of the country most dependant on central government funding by creating four separate grant bands to group councils into, based on the extent to which different councils are reliant on government funding. These bands or 'floors' set different limits for their reductions and thereby protect councils against the sharper grant reductions they would otherwise have faced.
- Established a transitional grant of £85 million for 2011-12 and £14 million in 2012-13. This transitional funding will help councils manage issues related to the ending of the Working Neighbourhoods Fund. This was a three year fund that was always scheduled to end in March 2011.
Ministers have also sought to deliver a fair deal to local taxpayers and all councils by:
- Taking a fairer and more progressive approach to calculating grant than that used in the past by focusing on the impact any grant reductions would have on the all important spending power of individual councils. Local authority budgets are not just made up of formula grant - they also include other government grants plus council tax receipts. A focus on spending power therefore considers the financial position of councils in the round - this includes funding from the Department for Health totalling £648 million in 2011-12 and £622 million in 2012-13 of NHS funding to support social care and benefit health, improving integrated working.
- Limiting the average spending power reduction across all councils to 4.4 per cent in 2011-12 and ensuring that no council faces a reduction of more than 8.9 per cent in spending power in 2011-12 or 2012-13; the provisional settlement today distributes the £29 billion in 2011-12 and the £27 billion in 2012-13 that the October Spending Review allocated to local authorities through formula grant.
- Protecting the public from council tax rises by making £650 million available to fund a one year freeze on council tax, offering real help to families and pensioners. The funding will continue over the Spending Review period to prevent council tax from shooting up next year. Local taxpayers living in an average Band D home could save up to £70 a year over the next four years.
- Rolling £2.4 billion funding into the formula grant to support adult social care services - one of the biggest pressures councils face - ensuring that the lion's share of resources go to councils delivering social services and that the needs of the most vulnerable people are met.
- Making additional resources available through the Early Intervention Grant to support early years' services, the Regional Growth Fund to support areas to deliver economic growth and the New Homes Bonus to establish a financial incentive for councils to deliver housing.
Secretary of State for Communities and Local Government Eric Pickles said:
"This is all about how we raise and spend taxpayers' money. Government has been living a credit card lifestyle at taxpayers' expense, and now it's time to pay off some of those bills.
"There has been a great deal of speculation and scaremongering about what the implications of the local government settlement might be. The reality is that despite the toughest economic circumstances in recent memory, the Coalition Government will ensure that next year the average reduction in councils' spending power will be 4.4 per cent.
"By adopting an intelligent and fair approach to the way funding is allocated we have been able to ensure those parts of the country that are most reliant on central funding continue to get the lion's share of the taxpayers' money that is available. Funding fairness underpins this settlement.
"We are protecting the public from excessive council tax rises by stopping any council tax revaluation and setting up a £650 million fund so town halls can freeze council tax this April. This will offer real help to families and pensioners.
"Taxpayers are no longer prepared to write a blank cheque for the public sector. But they do want less interference in their local communities from Whitehall government. So the Coalition Government is delivering the most significant shift in power from officials in London to elected local councils in a generation.
"Whilst resources are tight in the current financial climate, council freedoms are not. Councils now have unprecedented freedoms over how to prioritise their money. The need to reduce public spending means that this is a unique settlement, but also a unique opportunity for councils to show how efficient they can be, root out the wasteful spending that still exists and ensure that money goes to the frontline public services."
The settlement is set against the background of the most radical shift in power to local government for a generation. Local authorities have already been given full control over £7 billion of funding, all non-schools ring fenced grants have been removed, councils and the NHS are being brought closer together and the bureaucratic burdens associated with inspection and targets have been removed.
This package of measures gives councils a radical new set of tools to manage reductions in line with the priorities and needs of their residents. They can protect frontline services providing they use the significant new freedoms and flexibilities they have been given to put everything they do under the spotlight, share services and increase transparency. A total of £2.4 billion of adult social care funding will also have been moved in to Formula Grant by 2014-15 - this is £1 billion more than for social care grants this year.
Notes to editors
1. The Department for Communities and Local Government has today published a Plain English Guide to the funding settlement to assist people who understandably may not know their Relative Needs Formulas from their Area Cost Adjustments, or their Damping Floors from their Formula Grants. 'A Plain English Guide to the Local Government Finance Settlement for 2011-12' is available here www.communities.gov.uk/documents/localgovernment/pdf/1796186.pdf.
2. Local Government accounts for around 25 per cent of all public expenditure. Councils were always going to have to play their part in fixing the black hole in the nation's finances.
3. Around a quarter of all council revenue is raised through council tax. The amount raised by individual councils through council tax varies dependant on the nature of the area. Revenue from council tax, along with other income a council receives, determines the overall level of a councils spending power. The more dependent a council is on formula grant funding from central government to fund their budgets the lower their spending power.
4. If in calculating the settlement Ministers had applied a blanket reduction in formula grant to all authorities it would not have accounted for the fact that some councils are more self sufficient and thus have more money available to spend and would have left a number of councils significantly worse off than others.
5. In order to fund the transitional grant and ensure that councils are protected from unmanageable reductions in their budgets in the first year, DCLG has taken difficult decisions on its own budget. Despite a reduction in DCLG revenue funding of 46 per cent in cash terms (equivalent to 51 per cent in real terms) over the spending review and 12 per cent in cash terms in 2011-12 the department has provided £85 million additional money next year for local government over and above the formula grant settlement. This has the effect of reducing the spending available for the department's own programmes by a further 4 per cent.
6. Detail of the spending power reduction for individual councils can be found here www.communities.gov.uk/documents/localgovernment/xls/1796201.xls.
7. The details of the spending power analysis and details of how the transitional grant limits reductions to 8.9 per cent in both years is set out in a consultation on the transitional grant available on the local government finance website. The analysis of spending power includes funding £648 million in 2011-12, and £622 million in 2012-13, through the NHS budget, to support social services and benefit health - promoting integrated working between Primary Care Trusts and local authorities.
8. The settlement is fair between different parts of the country - north and south, rural and urban, metropolitan and shire. We are getting formula grant to where it is needed most
In calculating the settlement ministers have ensured that formula grant funding per head is higher in those parts of the country with the highest level of need. For example, needy councils receiving high per head funding in 2011-12 are: Hackney, £1043; Tower Hamlets, £968; Liverpool, £764; Manchester, £714; Leicester, £602. Whereas less needy authorities receive much lower per head funding in 2011-12 are: Stockport, £305; Solihull, £263; Bromley, £214; Richmond upon Thames £158; Wokingham, £125.
9. This announcement marks the start of a further short period of statutory consultation which runs to 17 January. Ministers will then finalise their proposals and the settlement for 2011-12 will be debated in Parliament in early February in time for councils to set their budgets for next year.
10. The Coalition Government is giving more freedoms and flexibilities to councils, from reducing ring-fencing to bringing in a general power of competence in the Localism Bill. By cutting the red tape and Whitehall interference which holds councils back, this will give them the ability to protect frontline services and focus their spending on local priorities. This includes ending the expensive Comprehensive Area Assessments and Local Area Agreements. Independent research put the average annual cost of reporting back to government at £1.8 million. Leicestershire councils found they had 90 full time staff collecting and processing more than 3,000 individual data items for central government at a cost of £3.7 million a year. They also faced 83 different inspections every year.
11. The Localism Bill overturns decades of central government control and gives power back to local communities. We aren't just devolving power to local councils - we are also giving more power to citizens, community groups and neighbourhoods, to help local people shape and influence the places in which they live and help build the Big Society.
12. Councils can protect frontline services by sharing services and back office functions, improve procurement to get more for less, bring escalating senior pay under control, and use transparency to cut waste and empower the public to see how their money could be better spent.
13. The Home Office has today published allocations of grant to police authorities in England and Wales for 2011-12 and given an indication of how it intends to allocate funding for the years 2012-13 to 2014-15.
The Department for Transport has also published today the local transport capital settlement for individual local authorities in England. This gives details of the allocation of more than £3 billion over the next 4 years for local highways maintenance and over £1.3 billion for small transport schemes. The announcement gives the individual amounts that each authority will receive over the next two years, and indicative amounts for the two years after that. Funding allocations are calculated according to needs-based formulae that are developed with local authorities. The funding is not ring-fenced, and local authorities are free to spend their allocations in accordance with their priorities. This announcement follows a recent consultation on local transport capital funding. A summary of responses and the Department's proposed next steps are available on the Department's website at: http://www.dft.gov.uk/localtransportfunding.
The Department for Education is announcing local authority allocations for their Dedicated Schools Grant (DSG) and capital for 2011-12 and for the Early Intervention Grant in 2011-12 and 2012-13 and total funding for the pupil premium.
Tue, 14/12/2010 - 6:59am
#2
MPs rubbish government social care claims
MPs have rubbished government claims that councils can maintain current levels of adult social care without raising thresholds.
The government has repeatedly claimed that councils have no cause to raise eligibility criteria, despite a reduction in central government funding of 28% over the next four years.
A report by MPs on the health select committee, published today, has concluded that councils cannot promise to keep eligibility criteria at current levels.
Health secretary Andrew Lansley told the committee that annual efficiency savings of 3%, combined with pay freezes and the funding settlement, which includes an extra £1bn a year in funding for care from the NHS, was enough to sustain current care provision. "It is not sufficient to do everything; it is sufficient to sustain the position we are in," he said.
But the MPs disagreed. The report stated: "The evidence submitted to us, including the evidence submitted by the government itself, does not allow us to conclude that the spending review settlement, coupled with the pay freeze, is enough to allow councils to 'sustain' care levels without restricting eligibility criteria.
"Our analysis shows that, depending on spending decisions by individual councils, the social care sector will need to deliver efficiency gains of up to 3.5% per annum throughout the spending review period to avoid reducing their levels of care."
Richard Jones, president of the Association of Directors of Adult Social Services, backed the report's conclusions. "Social services directors will make every efficiency saving that they capable of," he said. "But I fear that, as MPs have confirmed today, it will be impossible in some authorities to maintain the standards of care we provide without restricting eligibility for those services."
The challenge facing councils was underlined by the announcement of the local government settlement yesterday, said Chris Ham, chief executive of the King's Fund.
"This once again highlights the importance of the Dilnot Commission's work in devising a new settlement for social care funding that will stand the test of time," he said.
The MPs said that, although removing the ring-fencing from social care funding from government was desirable if services were to be improved, it added a further level of uncertainty to the prospect of maintaining their standard.
The report also concluded that improving the interface between health and social care was "mission critical" to delivering the savings outlined in the spending review.
Although it said the transfer of £1bn from the NHS to social care represented a step in the right direction, the government needed to do more to lay down a policy framework. "It is not enough for the government to exhort change in this area: there must be a formal policy infrastructure that recognises the importance of achieving this," said the report.
It went on to warn that the financial pressures on councils could hinder efforts to increase interaction with health.
Related articles
Burstow defiant over funding settlement for adult care
Situation critical: Councils raise care eligibility thresholds
http://www.communitycare.co.uk/Articles/2010/12/14/116007/mps-rubbish-go...
Tue, 14/12/2010 - 7:46am
#3
Special Grants for 2011-12 Settlement
Children's Services
- Early Intervention Grant (MS Excel 72kb)
Adult's Personal Social Services
- Learning Disability and Health Reform Grant (MS Excel 43kb)
Police
- Neighbourhood Policing and CSOs (MS Excel 25kb)
Others
- Transition Grant (MS Excel 72kb)
- Preventing Homelessness (MS Excel 113kb)
- Housing and Council Tax Benefit Subsidy Administration Grant (MS Excel 43kb)
- Lead Local Flood Authorities (MS Excel 41kb)
Return to Local Government Finance Settlement Index
http://www.local.communities.gov.uk/finance/1112/specgrant1112/index.htm
Tue, 14/12/2010 - 8:05am
#4
London Councils response to the Provisional Local Government Fin
London Councils response to the Provisional Local Government Finance Settlement
Today's Local Government Settlement means a scale of spending reductions in the capital not seen in a generation says London Councils. Whilst recognising the scale of the challenge facing the public finances, cutting London's formula grant by over 11 per cent from next April will be a serious blow to London's communities.
Mayor Jules Pipe, Chair of London Councils, said:
"London Councils called for the frontloading of these cuts to be eased. The Government has taken a step in this direction, but frontloading remains at the heart of the Settlement
– the cut in April 2011 is almost 50 per cent higher than in year two.""London's councils are already planning for improved efficiency, shared services and new approaches to service delivery. The scale of these reductions is so large that no combination of these is sufficient to protect the services that Londoners expect to be funded."
related pages
Tue, 14/12/2010 - 9:45am
#5
Localism Bill - HOC
Eric Pickles (Secretary of State, Communities and Local Government; Brentwood and Ongar, Conservative)
I am today introducing the Localism Bill to Parliament. The legislation will set the foundations for the big society by radically transforming the relationships between central government, local government, communities and individuals. The provisions will devolve greater power and freedoms to councils and neighbourhoods, establish powerful new rights for communities, revolutionise the planning system, and give communities much more control over housing decisions.
The Bill will expand councils' freedom to act in the interest of their local communities through a new general power of competence. This long-awaited new power will mean that rather than needing to rely on specific powers, councils will have the legal reassurance and confidence to innovate and drive down costs to deliver more efficient services.
Powers for councils will be accompanied by greater powers for local people to hold their local authorities to account and to shape their local area. There will be a new right to challenge to take over services; a new right to bid to buy assets of community value such as libraries, public houses and shops; and a new right to veto excessive council tax rises through a referendum.
The Bill also contains significant reform of the planning system. It will replace the Infrastructure Planning Commission with an efficient and democratically accountable system for major infrastructure. It will enable regional planning to be swept away and, in its place, neighbourhood plans will become the new building blocks of the planning system with communities having the power to grant planning permission if a majority of electors are in favour.
The Bill will return decision-making powers on housing to local councils, giving them much greater control over allocation and tenure of social housing and the flexibility to use their social housing stock to the maximum effect and reduce waiting lists. It will enable a new national home swap scheme that will make it easier for social tenants to relocate. The housing revenue account subsidy system will be replaced with a more transparent system that serves local communities. The Tenant Services Authority will be abolished but its vital economic regulation functions will be preserved.
The Bill will create powerful incentives for economic growth by allowing local authorities to grant discretionary business rate discounts. Its provisions will also make small business tax breaks easier to take advantage of and give affected businesses a greater say in rate supplements.
Finally, the Bill will take forward a new settlement for London which will devolve significant power to the Greater London authority and London boroughs and streamline the plethora of agencies in London's public sector landscape.
Taken together, the measures in the Bill will give local government the freedom and powers to deliver the key front-line services people rely on and make important savings.
Tue, 14/12/2010 - 9:47am
#6
Local Government: Finance — Statement - HOL
Baroness Hanham (Parliamentary Under Secretary of State, Communities and Local Government; Conservative)
My Lords, with the permission of the House, I should like to repeat a Statement made in the other place by my right honourable friend the Secretary of State, Eric Pickles.
"The spending review set out how the Government would tackle the catastrophic levels of public debt by delivering necessary reductions in public spending to accelerate deficit reduction and put the public finances back on a sustainable footing. This has involved difficult, but essential and responsible, decisions. Every part of the public sector needs to do its bit to help reduce the highest deficit in the United Kingdom's peacetime history and rapidly rising national debt that this Government have inherited.
Last year, the Government borrowed one pound in every four that they spent. That was entirely unsustainable and risked our economic credibility. In contrast, our plan to eliminate the current structural deficit over five years has won the backing of the IMF, kept our credit rating steady and held interest rates down. The Office for Budget Responsibility's latest forecast confirms that we were right to take these steps. Its message is that Britain's economic recovery is now on track.
I have sought to achieve a fair and sustainable settlement for local government by listening to what the local government community has asked for. This will be a progressive settlement and fair between different parts of the country. First, we have focused resources on the most vulnerable communities with significant social challenges. These are often the areas that are most reliant on government grant, so equal grant reductions would leave the poorest places worst off. We have insulated them by giving more weight to the levels of need within different areas and less weight to per capita distributions. We have also grouped councils into four bands, reflecting their dependence on central government. More dependent places will therefore see proportionally lower falls than more self-sufficient places.
Secondly, we have listened to concerns about the front-loading of the reductions. The Local Government Association asked me to focus on local government's total spending power. That includes not just grants but also income from council tax and the National Health Service funding to support social care and benefit health. It said that reductions in spending power should be limited to 8 per cent. So far as possible, I have given the Local Government Association what it asked for. I have made sure that no authority will face more than an 8.9 per cent reduction in spending power in either 2011-12 or 2012-13. In fact, the average reduction in 2011-12 is 4.4 per cent. To fund this, I have transferred an extra £30 million of my department's budget to local government for 2011-12. I am also providing a grant of £85 million in 2011-12 and £14 million in 2012-13 to fund councils that would otherwise have seen sharper falls.
The spending review also announced that the Government will protect the public from excessive council tax rises. We have set aside £650 million so every council can freeze council tax next year without hitting local services. We will provide councils that freeze council tax with the equivalent of a 2.5 per cent increase in funding instead. This will provide real help to hard-working families and people on fixed incomes, such as pensioners. The Government also want to ensure that council tax payers are protected against any authorities that reject the offer and impose excessive council tax rises. We will introduce a power for residents to veto excessive council tax increases through a referendum. In the mean time, the Government can take capping action against councils that propose excessive rises.
When the House debates the final local government finance report next year, I will set out the capping principles. I will also shortly publish details of the figures that will be used to compare authorities' budgets between years, should capping be necessary. The previous Government had planned to cap the police authorities of Greater Manchester and Nottinghamshire after they set excessive increases in 2010-11. Subject to challenge, we will ensure that, should they decide not to freeze, neither can impose an increase of more than 2.5 per cent in 2011-12.
This settlement also supports the Government's commitments to adult social care, providing councils with sufficient resources to protect people's access to care and deliver improved quality and outcomes. This includes £650 million of National Health Service funding in 2011-12 to support social care services, promoting integrated working between primary care trusts and local authorities, and benefiting the health system. The settlement directs more formula grant to authorities that deliver social care.
Despite all the action we have taken, I recognise that local government still faces significant challenges. The vast majority of councils have been making sensible plans to address these. To support them I am restoring real power to councils-ending Whitehall interference and cutting red tape and the burdens of inspection and regulation. The localism Bill, published later today, will deliver a new democratic settlement to councils, overturning decades of central government control. For too long, councils have been barred from using their initiative and creativity to improve services. The limited power of well-being acted as an obstacle to cost savings, such as mutual insurance companies. Today's Bill will fundamentally change councils' freedom to act in the interest of their local communities through a new general power of competence. This will give councils the legal reassurance and confidence they need to innovate, drive down costs and deliver more efficient services.
I am also giving councils much greater control over their budgets. With very few exceptions, we have ended grant ring-fencing so that councils can decide for themselves how their money should be spent. We will also allow them to borrow against future business rates receipts. Councils now have the freedom and responsibility to concentrate on what residents want: protecting front-line services. To support them, we have set aside £200 million to help councils modernise and reduce back-office costs. Councils can protect front-line services by sharing services and back-office functions, improving procurement to get more for less, bringing escalating senior pay under control, and using transparency to cut waste.
Proactive councils are already taking the opportunity radically to rethink and transform their services. There are also substantial incentives available for councils to invest in longer-term projects. These include the new homes bonus and £1.4 billion for the regional growth fund over three years-a fund which goes well beyond the working neighbourhoods fund. There will now be a statutory consultation on the settlement for 2011-12 and I look forward to hearing representations from councils.
Finally, this is a transitional settlement, using an inherited system. That is why we have set out details only of the next two years to strike a balance between the need to help councils plan and the need to reform the system. This system, based on redistributing business rates, makes councils heavily reliant on handouts from central government. Some depend on us for up to 75 per cent of their spending power. It is part of the trend that has led to some areas of the country becoming almost completely dependent on the public sector. It makes planning difficult, weakens local accountability, stifles local innovation and there is no incentive for councils to invest in their local economy since they will see most of the proceeds disappear. That is why I have set up a review of business rates, with the intention that in future local government will be able to keep more of what it collects. Ultimately, those councils which invest and support the local economy will be better able to finance themselves. The local government resource review will begin in the new year. I commend this Statement to the House".
My Lords, that concludes the Statement.
This continues at http://www.theyworkforyou.com/lords/?id=2010-12-13a.426.2
Tue, 14/12/2010 - 10:04am
#7
LGA responds to finance settlement
Baroness Margaret Eaton, Chairman of the Local Government Association, said:
“This is the toughest local government finance settlement in living memory. A few councils have seen a reduction in the money they receive from the Government of up to 17% in the first year. As a result councils face a total funding shortfall of £6.5 billion over the next year.
“We have been clear that the level of spending reduction that councils are going to have to make goes way beyond anything that conventional efficiency drives, such as shared services, can achieve. We have to face the fact that this level of grant reduction will inevitably lead to cuts in services.
“The Government has recognised the impact the cuts will have on those areas of the country that rely most heavily on the public sector and has provided a limited amount of new money to help those areas cope.
“However, it still remains the case that the cuts are frontloaded rather than spread evenly across the four years. Councils now face incredibly tough choices about the services they continue to provide and those they will have to cut.
“It comes at a time when councils are seeing cost pressures mounting on services such as adult social care, child protection, waste management and flood defence.
“Councils knew the cuts were coming and did all they could to prepare. We already cut more than £1 billion from our budgets in the middle of this year. We will now pull out all the stops to minimise the impact of these cuts and build on our record of delivering new and better ways of doing things.”
ENDS
Tue, 14/12/2010 - 10:05am
#8
Limiting capitalisation fund risks deeper cuts to services, LGA
Limiting the amount of money councils can spend from their own capital resources risks local authorities having to make deeper cuts to services than they would otherwise have to, local government leaders have warned.
The Local Government Association, which represents more than 350 councils in England and Wales, is calling on the Government to increase the £200 million capitalisation fund that is currently set aside to pay for redundancy costs in 2011-12.
It argues that the funding currently available to pay for job losses is not enough for the level of redundancies that councils are likely to have to make will be forced to make even deeper cuts to services in order to find the money to fund redundancy payments. This could mean some staff potentially losing their jobs unnecessarily.
The LGA wants councils to be given greater flexibility over their own capital resources to pay for the redundancies they need to make. Around 140,000 local authority jobs are expected to be shed next year as a result of spending cuts.
The capitalisation fund has previously been available for councils facing unavoidable, large costs such as redundancy payments or equal pay settlements.
The Government’s decision to ‘front load’ a large proportion of the cuts into the first year, rather than allow councils to spread them evenly over the four years of the spending review, makes the need for a relaxation of the rules around capitalisation more urgent.
The front loading of the cuts means that councils that may be less able to manage a reduction in their workforce through voluntary redundancies, natural wastage and not filling vacancies may now have to impose compulsory job losses.
Cllr Richard Kemp, Vice-Chairman of the Local Government Association, said:
“Councils are determined to give taxpayers the best possible value for money. With front loaded cuts, councils need to make rapid workforce reductions. Often, the money to fund these one-off reductions can only be found from capital resources.
“On one hand the Government is urging councils to dip into their financial reserves to protect services while on the other hand it is preventing them from spending their own money.
“Local residents and council taxpayers will not consider that locking up these resources in the bureaucracy of central Government’s accounting rules is a sensible use of their money. Councils should be given more flexibility over their capital resources to pay for redundancy costs as they need to.
“The severe and unexpected front loading of the cuts limits the scope of councils to reduce their spending through more innovative measures, such as shifting to shared services, renegotiating longer-term service contracts or outsourcing service delivery. Major changes such as these take time and money to implement. Councils need the flexibility of capitalisation to help restructure their services as quickly and efficiently as possible to avoid unnecessary job losses.”
ENDS
Notes to editors
Capitalisation simply means councils being able to use their assets to pay for spending that might otherwise be classed as revenue. Councils are not asking for more money from Government, but permission to spend their own money to deliver the objectives the Government has set them.
Councils have to seek a ‘capitalisation direction’ from the Government for this kind of spending.
Example
A council might have an option to spend £1m capital to improve the energy systems in a building, generating a saving of £100,000 a year. This could be paid for through capital – without reference to external bodies.
The same council might have the option to spend the same £1m of capital funds on restructuring its workforce, paying for staff redundancies. That might save £200,000 a year. However, because this spending is considered revenue, the council can only use its own capital funds if it gets a ‘capitalisation direction’ from the Government.
Tue, 14/12/2010 - 10:44am
#9
Councils facing 9.9% core funding cut
Councils in England are to face cuts of almost 10% next year in their core central government funding.
The coalition said the "formula grant" from Whitehall would be reduced by 9.9% in 2011/2012 and by 7.3% in 2012/2013.
The cuts are part of a policy to cut central funding to local authorities by 28% over four years.
Ministers promised a "new democratic settlement", with more money being found to help deprived areas. But Labour called the cuts "devastating".
In the House of Commons, Communities Secretary Eric Pickles said councils would see their "spending power" reduced by on average 4.4% next year, with no authority facing a decline of more than 8.9% for any of the next three years.
These figures - published for every council - are smaller than the overall 9.9% because they include all other grants and income that councils get, such as council tax and NHS funding.
The government is also publishing a Localism Bill, whose measures include:
- Giving local people and organisations the right to buy community assets like shops, pubs and libraries; if a council decides to sell a property, community organisations will get extra time to develop their bid
- Allowing communities to question how services - such as children's centres, care homes and transport - are being run, and potentially take them over
- More power for local people to overrule planning decisions, decide where new homes should go and protect green spaces
- Powers to create directly elected mayors in 12 cities
- Powers for people to approve or veto "excessive" council tax rises
The bill also includes plans for a change in the role that councils play in finding accommodation for homeless families.
To read more http://www.bbc.co.uk/news/uk-11980367
Tue, 14/12/2010 - 4:27pm
#10
Local government finance statement
Secretary of State for Communities and Local Government, Eric Pickles, made a statement to the House of Commons on Monday 13 December on finance for English local authorities from 2011 to 2013.
- Video and Audio: Local Government Finance
- Commons Hansard: Local Government Finance
- About Parliament: Ministerial statements
Oral statements
Oral statements are made after Question Time (or at 11am on a Friday). Statements usually relate to matters of policy or government actions. At the end of a statement, MPs can respond or question the government minister on its contents.
http://www.parliament.uk/business/news/2010/12/statement-on-local-govern...
Tue, 17/05/2011 - 6:13pm
#11
DCLG: Average revenue spending power per head - 2011-12
Summary:
This table shows average revenue spending power per head for 2011-12
DCLG: Average revenue spending power per head - 2011-12 (Excel format, 44 Kb)
and
This is a council 'heat map' showing average revenue spending per head for 2011-12.
DCLG: Average revenue spending power per head - 2011-12 (PDF format, 1.33 Mb)
Mon, 11/07/2011 - 3:41pm
#12
Making public services better for everyone
Having access to high-quality public services is essential to our modern society. The better our public services, the more we help those most in need.
You will find fantastic examples of what great public services can offer individuals and communities all over the UK. Many of our public services are among the best in the world, with our public sector professionals leading in expertise and innovation.
However, the delivery of these services is not always consistent—with the most poor often being the most affected. Our old-fashioned, centralised approach means there’s too much “take what you’re given” and not enough focus on improvement and accountability. We want to change things so that everybody in the UK—no matter where they live, or what their circumstance—benefits from the best services available.
Open Public Services will encourage innovation and give people more choice and control over the services they use by putting power directly in the hands of millions of families and thousands of communities.
We can’t do everything all at once, so we have set up this website so that you can give us your suggestions and tell us your priorities between now and the middle of September.
Wed, 13/07/2011 - 12:53pm
#13
Open Public Services White Paper
The Open Public Services White pPaper was published on 11 July 2011, setting out the Government’s plans for improving public services.
By putting choice and control in the hands of individuals and neighbourhoods, public services will become more responsive to peoples’ needs. The White Paper sets out the government’s approach to public services by applying five key principles:
- Choice – wherever possible the Government will increase choice
- Decentralisation – Power should be decentralised to the lowest appropriate level
- Diversity – Public services should be open to a range of providers
- Fairness – the Government will ensure fair access to public services
- Accountability – Public services should be accountable to users and taxpayers.
The White Paper will be followed over the summer by a wide-ranging discussion with individuals, communities, public sector staff, providers and others with an interest in how public services are delivered.
Click here for details
Sun, 31/07/2011 - 5:05pm
#14
DoH PCT Revenue 2011/12
Mon, 01/08/2011 - 11:47am
#15
Whitehall spending 'cut by £3.75bn'
The government says it saved £3.75bn in 10 months by cutting jobs and projects, and spending less.
Cabinet Office Minister Francis Maude described the savings, confirmed by an independent audit, as "staggering".
Rent, advertising, consultants and 17,000 civil service posts were cut between May 2010 and March 2011 as part of measures to cut the UK deficit.
TUC general secretary Brendan Barber said savings were being achieved by making "deep cuts in valued services".
The Cabinet office said the savings included:
- £870m from cutting consultancy spending
- Nearly £500m from reducing spend on temporary agency staff
- £400m from cutting marketing spending
- £360m from centralising spend on common goods and services
- £800m from renegotiating deals with some of the largest suppliers to government, equivalent to 6% of a full year of spend with those suppliers
- £150m from 2010-11 budgets for government's major projects, by halting or curtailing spending
- £300m by "applying greater scrutiny" to Information and Communication Technology (ICT) expenditure
- £90m reduction on property expenses by "exerting better control" over lease renewals
- the equivalent of £300m saved on 2010-2011 salary costs by reducing the size of the civil service by more than 17,000 posts
'Unjustifiable costs'
Mr Maude said the £3.75bn was "just scratching the surface of what we have planned for the coming months and years".
"To put £3.75bn into context, it's equivalent to the salaries of 200,000 junior nurses, or 150,000 secondary school teachers, it could pay for several Whitehall departments, and it's about the same as the revenue derived from one penny of the basic rate of income tax.
To read more http://www.bbc.co.uk/news/uk-politics-14359927
Mon, 05/09/2011 - 11:33am
#16
A fair deal for the voluntary and community sector - from Whiteh
A fair deal for the voluntary and community sector - from Whitehall to town halls
Communities Secretary Eric Pickles has today published guidance to local authorities on how to protect voluntary and community groups from disproportionate cuts to their funding.
It follows warnings from Mr Pickles that councils should not "pull up the drawbridge" in this tough economic climate, but should instead look to give greater support for local groups that do so much for some of the most vulnerable in their communities.
Mr Pickles has also sought to cut reams of red tape on local councils to make it easier and more efficient for them to meet the needs of their residents. The Communities Secretary has scrapped 56 pages of prescriptive statutory guidance on local priorities introduced by the previous Government.
Instead, councils will have only one page of guidance on how best to achieve Best Value in their areas - not just in terms of cost for local taxpayers, but also the wider social and environmental benefits above and beyond the services they provide.
And in deciding how best to fulfil their Best Value Duty, councils are required to consult those using, or likely to use, a local service. This should include community and voluntary organisations.
This new deal sets out that councils should not pass on larger reductions to their local voluntary and community sectors and small businesses than they take on themselves. In particular:
- those councils looking to reduce or end funding, or any other support to one of these organisations should give at least three months' notice of the actual reduction to both the organisation involved and the users of the service they provide
- councils should involve and discuss their plans with the organisation and local service users as early as possible before making any final decisions on the future of the service; and
- councils should give organisations, local service users and the wider community the opportunity to offer options for reshaping and reducing the costs of the services provided.
Central Government departments have already signed up to these same principles.
Mr Pickles said:
"Community and voluntary groups provide vital and valuable services to our communities, often aimed at some of the most vulnerable in our society. They deserve a fair deal.
"That's why I'm introducing new guidance on councils to consider how they fulfil the Best Value Duty for their communities, not just in stark money terms but also in terms of the wider benefits to residents above and beyond the services that these organisations provide. And in return, I'm cutting reams of red tape that in the past have hampered council efforts to get their important work done.
"I'm not asking councils to do anything that I wouldn't do myself, so all Central Government departments are now signed up to these fair new standards."
In the new streamlined statutory guidance Mr Pickles has also clarified that there is no requirement for councils to undertake lifestyle or diversity questionnaires of their residents or their suppliers. Ministers want to see an end to the costly and unnecessary surveys and questionnaires being sent out by some councils alongside responses to residents' queries about rubbish collection or joining the local library. These surveys often ask personal questions about religious beliefs, sexual orientation and ethnicity, often duplicating information already collected in the Census.
Mr Pickles said:
"At a time when taxpayers are watching their pennies, the last thing councils should be doing is sending out unnecessary and intrusive questionnaires.
"Local residents shouldn't be asked to reveal detailed personal information just because they've enquired about getting their bins emptied or how to join their local library.
"Clamping down on such town hall activity will save taxpayers' money and protect the privacy of residents of all backgrounds."
Notes to editors:
1. The new Best Value Guidance applies to all best value authorities, which are councils plus a range of other authorities including Police, Fire, the Broads Authority; and Waste and Transport authorities. It is available at www.communities.gov.uk/publications/localgovernment/bestvaluestatguidance.
2. Eric Pickles first outlined his action plan to support the voluntary and community sector at the National Council of Voluntary Organisations conference in March 2011. Further details on the Communities Secretary's speech can be seen at: www.communities.gov.uk/news/newsroom/1855041.
Wed, 05/10/2011 - 5:32pm
#17
Council tax freeze
The Chancellor of the Exchequer has today announced new support for local authorities to help them freeze council tax next year.
The Government has set aside an extra £805 million to help freeze council tax bills for hardworking families. The support for local authorities, on top of the existing freeze, means that taxpayers living in an average Band D home in England could save up to £72 on a five per cent rise in council tax.
A second year’s council tax freeze will give real help to households in difficult times and this extra funding will make a positive contribution to those local authorities who wish to keep council tax down.
A new grant scheme will be open to all billing and major precepting authorities, including police and fire authorities, which decide to freeze or reduce their council tax next year. If they do, councils will receive additional funding, equivalent to raising their 2011-12 council tax by 2.5 per cent. Police and fire authorities will receive additional funding equivalent to raising their 2011-12 council tax by 3 per cent.
Notes for Editors
1. A freeze in council tax this year will save families £72 compared to a 5 per cent rise, on top of the savings already made this year.
2. The Department for Communities and Local Government will shortly write to all English local authorities with full details of the scheme, including providing an indicative breakdown of estimated grants to help local authorities with budget planning.
3. The council tax freeze offer will apply separately to each billing and major precepting authority in England (rather than to each council tax bill issued). Billing authorities include shire districts, metropolitan districts, London Boroughs and unitary authorities and major precepting authorities include county councils, fire & rescue authorities, police authorities and the Greater London Authority.
4. If an authority sets its basic amount of council tax (i.e. its Band D council tax) in 2012-13 at a level which is no more than its basic amount of council tax in 2011-12, it will receive a one-off grant equivalent to a 2.5 per cent increase. Police and fire authorities will receive a grant equivalent to 3 per cent of their 2011-12 basic amount of council tax.
5. An unringfenced grant in support of the scheme will be paid to each eligible billing and major precepting authority based on the formula. Payments to authorities will be made through the grant-making powers in section 31 of the Local Government Act 2003.
6. Local authorities who wish to reduce their council tax in absolute cash terms are still also eligible to receive the grant. Local authorities who choose to increase their council tax will not be eligible for the grant scheme.
7. The Spending Review already provided £650 million a year of funding to local authorities to freeze their council tax in 2011-12. All local authorities (including police and fire authorities) took up the grant scheme, meaning there was no increase in the average band D amount households had to pay.
8. Devolved Administrations will receive Barnett consequentials for this additional spending.
http://www.hm-treasury.gov.uk/press_110_11.htm
also refer http://www.communities.gov.uk/newsstories/newsroom/2000166
Resourced from http://www.disabilityalliance.org/ctfreeze.htm
Mon, 14/11/2011 - 11:53am
#18
Plans for a second year's council tax freeze set out
We know households are facing difficult times so we're helping keep living costs down with a second year's council tax freeze, Local Government Secretary Eric Pickles said today, as new scheme details were published.
Estimates of the Government grant boost that every council in England would receive if they commit to holding or reducing average Band D council tax for a second year were published today.
This follows the announcement that Government has set aside an extra £805 million, of which up to £675 million will be available to local authorities in England to help keep council tax down for a further year.
This new support builds on the 2011-12 freeze offer taken up by all councils, boosting what they could get over four years to £3.3 billion if they hold council tax for a second year. The new scheme would mean that local taxpayers living in an average Band D home in England could once again save up to £72 compared to a 5 per cent rise in council tax on top of this year's council tax saving of up to £72.
The new voluntary scheme will be open to the same councils as last year. Councils that freeze or reduce their council tax next year will get a one off grant equivalent to raising their council tax by 2.5 per cent. Police, and single purpose fire and rescue authorities will get a 3 per cent equivalent, with the Greater London Authority and the City of London getting intermediate offers.
Eric Pickles said:
"Last year every council signed up to our council tax freeze, but with many families still facing difficult times we're rolling over our successful scheme so councils can keep a lid on bills for another year.
"Our two-year freeze promise, potentially worth up to £72 each year to Band D residents, is in stark contrast to the years before when council tax was allowed to double.
"Today every local authority can see how we'll back them to hold council tax steady for another year and leave millions of taxpayers with more of their hard earned cash in their pockets."
Notes to editors
1. Council tax bills hit £1,439 on Band D in England in 2010-11. This year, 2011-12, the average Band D bill set by local authorities remained at £1,439. In London it was £1,308; in metropolitan areas it was £1,399; and in shire areas it was £1,484. Council tax was £688 in 1997-98. This means council tax has risen over one hundred per cent - or an extra £751 a year on a Band D home. Since all other Bands are set as a percentage of Band D, homes in every band have seen their bills double.
2. The value of saving for taxpayers by area from two years of the council tax freeze scheme compared to a five per cent rise can be found here: www.communities.gov.uk/documents/newsroom/1786823/2028892.xls.
3. To help local authorities with their budget planning, we have published an estimate of the grant each participating authority would receive. Grants will be finalised in March 2012 once authorities have reported the tax base underpinning their calculation of council tax for 2012 13. A further £675 million will go to help local authorities in England freeze their council tax next year on top of this year's freeze. Of this, the London offer of around £100 million is based on a 2.5 per cent increase for Borough councils, a combined percentage increase of 3 per cent and 2.75 per cent for the Greater London Authority and of 2.75 per cent for the City of London. Details of for each area can be found here: www.communities.gov.uk/documents/newsroom/1786823/2028905.xls.
4. The scheme for 2012-13 will comprise a one-off payment of grant, which is payable for one year only. The Localism Bill proposes to give the public the right to veto excessive council tax rises. Councils that set council tax increase above a ceiling approved by Parliament each year would automatically trigger a referendum of all registered local electors in their area: www.communities.gov.uk/newsstories/newsroom/1658293.
5. The scheme will be voluntary; and will apply separately to each billing and major precepting authority in England (including police and fire and rescue authorities) rather than to each council tax bill issued. Local precepting authorities, such as town and parish councils, will not be included in the scheme, but the Government urges them to exercise restraint and help make sure no council tax payer faces an increased bill. The Devolved Administrations will receive Barnett consequentials for this additional spending.
6. Assuming that all authorities take up the offer to freeze or reduce their council tax in 2012-13, we estimate Government will provide £3.3 billion of grant over the Spending Review period. A breakdown of the funding for each area can be found here: www.communities.gov.uk/documents/newsroom/1786823/2028914.xls.
7. Average Band D council tax and percentage change between 1993-94 and 2011-12 are shown below:
| Year | £ | % change |
|---|---|---|
| 1993-94 | 568 | |
| 1994-95 | 580 | 2.1 |
| 1995-96 | 609 | 5.0 |
| 1996-97 | 646 | 6.1 |
| 1997-98 | 688 | 6.5 |
| 1998-99 | 747 | 8.6 |
| 1999-00 | 798 | 6.8 |
| 2000-01 | 847 | 6.1 |
| 2001-02 | 901 | 6.4 |
| 2002-03 | 976 | 8.2 |
| 2003-04 | 1,102 | 12.9 |
| 2004-05 | 1,167 | 5.9 |
| 2005-06 | 1,214 | 4.1 |
| 2006-07 | 1,268 | 4.5 |
| 2007-08 | 1,321 | 4.2 |
| 2008-09 | 1,373 | 3.9 |
| 2009-10 | 1,414 | 3.0 |
| 2010-11 | 1,439 | 1.8 |
| 2011-12 | 1,439 | 0.0 |
Councils in England will lose an average of 4.4% in central government grant, the government has announced, leading to fears for the future of social work services.
Communities secretary Eric Pickles told MPs that no authority would see its grant cut by more than 9%.
Responding to expectations that councils in northern England would be worst hit, Pickles said: "The reality is that, despite the toughest economic circumstances in recent memory, the coalition government will ensure that next year the average reduction in councils' spending power will be 4.4%.
"By adopting an intelligent and fair approach to the way funding is allocated, we have been able to ensure those parts of the country that are most reliant on central funding continue to get the lion's share of the taxpayers' money that is available. Funding fairness underpins this settlement.”
Pickles insisted new financial freedoms for councils would limit the impact of the cuts, allowing them to choose local priorities.
Local government experts had forecast that shire counties and councils in the South would be spared the worst of the cuts, while metropolitan and unitary councils in the North - widely regarded as the biggest beneficiaries of the Labour government’s funding settlements – would be hit hardest.
Manchester, Rochdale, Knowsley, Liverpool, Newham and Tower Hamlets councils – all based in relatively deprived areas – are among those facing the maximum 8.9% cut next financial year. The government has created a transition grant to limit the anticipated scale of the cuts.
Find out your council's grant cuts here.
Unions warned that cuts would inevitably hit frontline services and local government staff.
"Eric Pickles may talk about local authorities doing more with less, but the public should not be fooled; this is not possible," said Heather Wakefield, Unison's head of local government.
"Cuts on this scale cannot be painless. Vital local services, such as libraries and day centres, are already shutting their doors. Charges for others, such as home care for the elderly and meals-on-wheels, are on the up. After today's announcement, this pattern will only gather pace."
Liverpool Council today announced that half of its top managers would be axed to save £4.5m a year.
As part of its restructuring, the role of director of children, family and adult services, which oversaw a combined budget of £740m, would be split into two.
Council leader Joe Anderson, a former social worker, said: "The city council has suffered from a top-heavy, bloated senior management set-up, weighted down with too much paperwork, form-filling and box-ticking.
"These radical changes mean we will have a much leaner, more efficient team of managers who will be 100% focused on delivering the council's priorities - reducing waste and bureaucracy and making sure that, despite the cuts, we continue to deliver excellent services that meet today's demands and the needs of our residents."
The maximum salary of directors will be £140,000 - £20,000 down on the previous level - while the number of senior management posts would fall to 43 from 91.
Among those widely expected to lose cash is Blackburn with Darwen Council, whose chief executive Graham Burgess predicted in October that its funding would be cut by 30% over the next four years.
"These front-loaded cuts mean the reductions will be bigger and come much faster than expected," Burgess said. "While we are looking at a number of opportunities for staff, such as voluntary redundancies and early retirements as well as deleting vacant posts, it is unlikely we will be able to avoid compulsory redundancies given these are very difficult times we face."
Lord Victor Adebowale, chief executive of Turning Point, the social enterprise working with people with drug and alcohol problems or mental health issues, said: “We are yet to find out in detail how these proposed cuts to local government budgets will manifest themselves, but it would be naïve to think they will have no effect on frontline services whatsoever.
“Social care services are under particular threat as the majority of their funding is allocated by local authorities. It is also worth considering that health and social care are inextricably linked and that, if councils make substantial cuts to their social care budgets, it is likely to be the NHS that will pick up the bill.”
http://www.communitycare.co.uk/Articles/2010/12/13/116006/fears-for-serv...