Headlines: December 11th, 2003

New money for local councils, announced in the Chancellor’s pre-Budget statement, may not be enough to prevent above-inflation council tax rises in many areas, but it will certainly help, according to the Local Government Association. Reacting to Gordon Brown’s plans it said the extra funding was welcome for councils grappling with the choice between pushing up council tax or cutting vital services.Mr. Brown announced around 340 million pounds of new cash to help councils with next year’s spending on key services and their council tax dilemmas. The money is in addition to the 420 million pounds promised last month by Deputy Prime Minister John Prescott in the local government funding settlement, following lobbying by the LGA for extra cash to meet cost pressures and new responsibilities.

Sir Jeremy Beecham, the LGA chair said local government was getting its message across and the new money promised by the Chancellor was more than just a welcome sticking-plaster measure. It pointed the way, he said, to a more fundamental change in local government finance to a fairer, more transparent and accountable system, allowing people to understand more easily the relationship between council spending decisions and the local tax they had to pay.

Authorities, he said, would do their best next year to keep council tax rises as low as possible. That echoed comments after the pre-Budget statement from the Deputy Prime Minister who said the government and council taxpayers now expected local authorities to deliver. He believed that next year authorities could, and should, deliver council tax increases in low single figures. He repeated his warning that he was prepared to use capping powers if necessary.

The largest public service union, UNISON, also welcomed the fact that the Chancellor had “stuck to his guns” and was continuing to invest in public services but the General Secretary, Dave Prentis, warned that it did not believe there was sufficient additional money for local government to deliver world class public services. UNISON, he said, would be talking to the Treasury and the ODPM about local government funding and the implications for next year’s pay round.