The Government says its allocation of funding and allowances for local government this year is the most generous for the sector since the introduction of the council tax.Local Government says the settlement is good in parts – but claims new measures on council tax benefit could see the ‘nearly poor paying for the really poor’.
The deal does mean an extra L2.6 billion for councils this year, along with a new system of distribution that aims to be fairer and provide more stability. Like other sectors, local government has been given a three year steer on finances, in order to aid with financial planning.
Deputy Prime Minister John Prescott said:”This settlement provides a three year period of financial stability during which local councils can concentrate on improving their services. Together with our reform of local government, this gives responsibility back to councils to spend wisely to meet local needs.”
The Local Government Association said the financial settlement was better than in recent years, but that local authorities would still be under pressure to deliver the services people needed.
With much of the increase allocated to education and social services, there are fears that some district council services, and the fire service, could well come under financial pressure.
The Government says there is no need for any council to raise the council tax by more than 4.5 per cent, local government is predicting a 5 per cent average.
The LGA also attacked the Government’s decision to go ahead with a scheme that makes council taxpayers foot the bill for council tax benefit increases above a guideline level.