WIREDGOV

Healey confirms inflation-busting settlement for Councils

COMMUNITIES AND LOCAL GOVERNMENT News Release (017) issued by The Government News Network on 24 January 2008

Local authorities in England will benefit from a £2.7bn increase in funding from central government next year, Local Government Minister John Healey confirmed today.

Mr Healey also set out firm proposals for further funding increases for the following two years, giving councils the certainty needed to manage their budgets effectively.

Councils will receive £70.4bn in 2008-09, an increase of four per cent. And, under plans for the subsequent two years, councils will receive £73.5bn and £76.7bn, increases of 4.3% and 4.3% respectively.

The announcement confirms core grant funding next year, which is part of the first ever three year settlement delivering 1% real terms increases each year for the next three.

Under the proposals, by 2010-11 funding to local authorities will have risen by 45% since 1997, with above-inflation increases every year for 13 years.

Councils will also be expected to make 3% efficiency gains, like the rest of the public sector, each year for the next three, which could free up as much as £4.9bn to be invested in public services or to help keep council tax bills low.

Local Government Minister John Healey said:

"Today's settlement is fair and affordable, giving every council the resources to deliver high quality public services, and the certainty to manage their budgets for the next three years: by 2010-11, councils will have benefited from 13 straight years of inflation-busting increases in funding from central government.

"Financial and spending decisions are now increasingly in councils own hands with the first ever three year settlement, a huge cut in Whitehall strings and a real terms funding increase for the eleventh year running. "The demand for efficiency has been driven by central government in the past, but in future this demand will increasingly and rightly come from local residents. It isn't just about how much money the Government gives to councils, it is also about what they can do themselves to free up £1.5bn next year to improve services or cut council tax bills." Notes to Editors:

Allocations for individual authorities are available here:

Grant floors for next year were also confirmed today:

* For authorities with education and social services responsibilities, 2%
* For police authorities, 2.5%
* For Fire and Rescue Services, 1%

The Government also announced provisional allocations of 61 specific grants from eight central departments in December. Confirmation of these grants will also be announced shortly.

Details of the settlement can be found at: http://www.local.communities.gov.uk/finance/0809/grant.htm#set

News Releases: http://www.communities.gov.uk/newsroom