Date of speech - 20 January 2010
The Parliamentary Under Secretary of State (Barbara Follett):
I have today laid before the House the Local Government Finance Report (England) 2010-11. This report establishes the amounts of revenue support grant (RSG) and
non-domestic rates (NDR) to be paid to local authorities in 2010-11, and the
basis of their distribution. A draft of this report was issued for consultation on 26
November 2009.
We received a total of 65 written responses from 58 individual authorities and
formal and informal groupings of authorities during the consultation, and I met
delegations from the Local Government Association, London Councils, and
the County Councils Network.
Having considered the views of the local authority associations and others
who have commented on the provisional settlement, I have decided to confirm
my proposals on the basis of distribution of formula grant for 2010-11.
The final figures published today for 2010-11 confirm those originally
published in January 2008. In line with Government's policy on multi-year
settlements, it has always been clear that the settlement for 2010-11—as the
third year of a three-year settlement—would not be changed from that
previously published other than in exceptional circumstances. Having fully
considered all the representations received during consultation I have not
found such exceptional circumstances.
The overall settlement represents a continued real-terms increase in
investment in local government, which will allow authorities to continue to
deliver improving services at an affordable cost. Total formula grant for 2010-
11 will be £747m, or 2.6 per cent., higher than in 2009-10 on a like-for-like
basis. Specific grants, such as the Dedicated Schools Grant, are on top of
these figures and bring the total increase in funding for local authorities to 4
per cent. in 2010-11. In our first 10 years up to 2007/08 we increased total
Government grant by 39% in real terms. This provided 10 straight years of
above inflation increases in Government grant for authorities overall. Over the
current Spending Review period, we are providing an additional £8.6 billion to
local government, an average 4% cash increase per year.
I have also laid an order for the House's approval to cap Warwickshire police
authority in advance for 2010-11, at a budget requirement which equates to
council tax increases of around 3% in both 09-10 and 10-11. I am also putting
all authorities on notice that the Government will not hesitate to cap any
excessive council tax increases set by individual authorities in 2010-11 and that
it would be a mistake for any authority to presume they will not be capped if
they stay within the capping principles which applied in 2009-10. We have
already initiated capping action against three police authorities in advance for
2010-11 to limit their council tax increases to around 3%. No other decisions
have been taken on capping for 2010-11, but we have made clear that we
expect the average Band D council tax increase in England to fall to a 16 year
low. The Government has maintained the three-year settlement in challenging
economic circumstances and there can be no excuse for any authority setting
an excessive council tax increase in 2010-11.
I shall be sending copies of the Local Government Finance Report to all local
authorities in England, and making available full supporting information on the
Communities and Local Government website at
http://www.local.communities.gov.uk/finance/1011/grant.htm
.Copies of the report and related tables showing each authority's allocation of
formula grant and other supporting material have been placed in the Vote
Office and the Libraries of both Houses.
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