2005 06 LOCAL GOVERNMENT FINANCE SETTLEMENT FOR CONSULTATION by hcj

VIEWS: 19 PAGES: 5

									Briefing for Executive Committee – 7 December 2004


       2005/06 LOCAL GOVERNMENT FINANCE SETTLEMENT FOR
                    CONSULTATION – KEY FACTS

      National Picture

      Headlines

      1.         The Minister of State for Local Government on 2 December announced the
                 proposed local government finance settlement for 2005/06. The key features
                 are:

                 (a)         A £3.5 billion increase (over 2004/05) in councils‟ total of Government
                             grants – a 6.2% increase in cash terms. The increase in Formula Grant is
                             5.4%.

                 (b)         An extra £637m beyond the figures in the 2004 Comprehensive Spending
                             Review. This includes an extra £358m in Revenue Support Grant. There
                             is new money of £100m for safeguarding children and £100m for access
                             and systems capacity (for 2005/06 only). There is £28m extra for Fire to
                             enable authorities not to repay transitional funding.

      2.         Ministers have made clear they expect to see a national average increase in
                 council tax of less than 5%. They have said they are “prepared to take even
                 tougher capping action next year” to ensure that tax increases are in line with
                 their expectations.

      3.         The government has changed the judgmental part of grant formula to benefit
                 shire district, police and fire authorities at the expense of shire counties.

      4.         The government has issued an “amending report” for 2003/04 to effect a
                 correction to mid-2001 population data. This has resulted in a claw-back of grant
                 from counties of £26m. Suffolk‟s loss of grant is £1.1m. The “amending report”
                 for 2004/05 will not be issued for another 12 months.

      Supporting Information

      5.         Ministers have decided not to meet individual authorities this year. They will be
                 meeting the major groups representing local authorities and be receiving written
                 representations in the usual way.

      6.         The Government expects all authorities to pass their schools‟ FSS increase on to
                 their schools budget, other than in wholly exceptional circumstances.

      7.         From April 2005, authorities will be given further opportunities to increase locally
                 raised revenue through the Local Authority Business Growth Incentives Scheme.
                 This allows authorities to retain a proportion of growth in business rate revenue,
                 with total freedom to spend this on locally determined priorities.

      8.         The Government will support authorities in promoting the take-up of council tax
                 benefit. Information on benefit take-up will be included with the winter fuel
      C:\Docstoc\Working\pdf\500b7c2d-680b-4a22-83e5-01ba2d56855c.doc
                                                                                                     1
           payments and on council tax bills. Ministers have confirmed the intention of
           developing proposals to streamline the claims process for pensioners.

9.         In April, the government announced a one-off payment (for 2004) of £100 per
           household, with someone aged 70 or over, in recognition of the impact of the
           Council Tax on older people. The chancellors pre-budget statement included a
           further one-off payment of £50 in 2005 for households with someone aged over
           70.


Settlement for Suffolk County Council

Headlines

10.        The changes for Suffolk (after adjusting the 2004/05 base for transfers of finance
           and function) are:

           a) Increase in Formula Spending Share (FSS)             £39.2m, or 6.7%

           b) Increase in Formula Grant                            £26.8m, or 6.7%

11.        The three tables appended to this report show the changes in grant by county
           council, region and class of authority.

12.        One of the causes of the increased grant in 2005/06 is due using updated New
           Earnings Survey (NES) data in the calculation of the Area Cost Adjustment
           (ACA). This has resulted in an increase to total grant of approximately £2m.

13.        It should be noted that detailed analysis work of the data is continuing to
           determine the full impact of the Settlement notification to Suffolk.

Schools

14.        The increase to be “passported” to schools is £17.6m (6.3%).

15.        The county council is also entitled to £1.5m of Transitional Support Grant. This is
           the second year of a grant aimed at alleviating specific schools‟ deficits caused
           by funding problems in 2003/04 and 2004/05.

Social Care Specific Grants

16.        The Access and Systems Capacity grant has received a one-off increase (for
           2005/06 only) of £0.6m. The total to be received is £1.7m.

17.        The allocation formula has changed for the Mental Health grant with the result
           that the amount in 2005/06 will be £0.114m less.

18.        There will be a reduction in the grant for „Supporting People‟ as follows:
                 Main Programme: -£1.188m (6% reduction)
                 Infrastructure Grant -£0.165m (20% reduction)




C:\Docstoc\Working\pdf\500b7c2d-680b-4a22-83e5-01ba2d56855c.doc
                                                                                            2
Grant increases for other Authorities in Suffolk

19.        The grant increases for Suffolk‟s district and borough councils and the police
           authority are:

           Babergh                                         6.0%
           Forest Heath                                    2.5%
           Ipswich                                         3.0%
           Mid Suffolk                                     4.5%
           St Edmundsbury                                  4.0%
           Suffolk Coastal                                 3.2%
           Waveney                                         3.6%


           Suffolk Police                                  3.7%



Further information

20.        Full details of the government‟s settlement for consultation can be found on:

           http://www.local.odpm.gov.uk/finance/0506/grant.htm




Bill Banks
Head of Strategic Finance
7 December 2004




C:\Docstoc\Working\pdf\500b7c2d-680b-4a22-83e5-01ba2d56855c.doc
                                                                                            3
                                                                     C
                                                                      am
                                                                        br
                                                                           id
                                                                                  ge




                                                                                                  3.00%
                                                                                                          4.00%
                                                                                                                  5.00%
                                                                                                                          6.00%
                                                                                                                                  7.00%
                                                                                                                                          8.00%
                                                                                                                                                  9.00%
                                                                                                                                                          10.00%
                                                                                                                                                                   11.00%
                                                                                       sh                                                                                   12.00%
                                                                               W ire
                                                                                   ilt
                                                                                      sh
                                                                  B                        ire
                                                                    uc
                                                                       ki           S
                                                                          ng ur
                                                                               h          re
                                                                       Le am y
                                                                           ic          sh
                                                                             es            i
                                                                                  te re
                                                                                     rs
                                                                                         hi
                                                                                             r
                                                                       W           Su e
                                                                           ar           ffo
                                                                              w              lk
                                                                                 ic




C:\Docstoc\Working\pdf\500b7c2d-680b-4a22-83e5-01ba2d56855c.doc
                                                                         Li ks
                                                                            nc           hi
                                                                                 ol re
                                                                        B           n
                                                                           ed sh
                                                                               fo          ir
                                                                                   rd e
                                                                                       sh
                                                                                           ire
                                                                                  N
                                                                                     or
                                                                                         fo
                                                                                C            l
                                                                                   um k
                                                                  N                      br
                                                                   or
                                                                      th                     ia
                                                                         am De
                                                                              pt von
                                                                                  on
                                                                                       sh
                                                                               C           ir
                                                                                  he e
                                                                                       sh
                                                                    G                      ire
                                                                      lo
                                                                         uc Dor
                                                                             es           s
                                                                                  te et
                                                                                     rs
                                                                                         hi
                                                                                            re
                                                                          O          Es
                                                                                         s
                                                                             x
                                                                     W for ex
                                                                        or          ds
                                                                            ce           h
                                                                               st ire
                                                                                   er
                                                                                       s
                                                                              So hire
                                                                                   m
                                                                            D ers
                                                                    N          er            e
                                                                     or            by t
                                                                         th            sh
                                                                            um             i
                                                                                  be re
                                                                                      rla
                                                                               C           n
                                                                                  or d
                                                                            Sh        nw
                                                                    N                      a
                                                                      or rop ll
                                                                          th           sh
                                                                              Yo ire
                                                                                   rk
                                                                                       sh
                                                                   N                       ire
                                                                     ot          D
                                                                        tin ur
                                                                                                                                                                                     % Grant Increase (Inc Fire) - County Council Comparison




                                                                            gh ha
                                                                                 a           m
                                                                        St ms
                                                                            af           hi
                                                                               fo           r
                                                                                   rd e
                                                                            La shi
                                                                                n            re
                                                                        H cas
                                                                           er            hi
                                                                              tfo            r
                                                                                   rd e
                                                                            H shi
                                                                               am re
                                                                                    ps
                                                                                         hi
                                                                                            re
                                                                        W              K
                                                                            es            e
                                                                                t S nt
                                                                          Ea         us
                                                                              st sex
                                                                                   Su
                                                                                       ss
                                                                                            ex
4
                                                              % Grant Increase - Regional Comparison


    7.00%
                                                                                 Includes
                                                                                  Suffolk
    6.00%


    5.00%


    4.00%


    3.00%


    2.00%


    1.00%


    0.00%
                  South West South East                       London             Eastern              East           West            Yorkshire      North East North West
                    GOR        GOR                             GOR                GOR               Midlands        Midlands           and            GOR        GOR
                                                                                                     GOR             GOR              Humber
                                                                                                                                       GOR




                                                 % Grant Increase - Class of Authority Comparison


            7.00%                                              Includes
                                                                Suffolk
            6.00%

            5.00%

            4.00%

            3.00%

            2.00%

            1.00%

            0.00%
                                                                                                                            ea




                                                                                                                                               s
                           e



                                           ire




                                                                                                               es
                                                                               ire




                                                                                                                                                          s
                                                               e




                                                                                               ts




                                                                                                                                                                         illy
                                                                                                                                            ea



                                                                                                                                                          ea
                          fir




                                                              fir




                                                                                              ric



                                                                                                              iti



                                                                                                                          ar
                                         tf




                                                                            tf




                                                                                                                                                                       Sc
                                                                                                                                         ar



                                                                                                                                                        ar
                     ith




                                                         ith




                                                                                                           or
                                                                                            st
                                     ou




                                                                          ou




                                                                                                                         on
                                                                                          di




                                                                                                                                                                      of
                                                                                                         th
                    w




                                                        w




                                                                                                                                       an



                                                                                                                                                    ire
                                   ith




                                                                         ith




                                                                                                                     nd
                                                                                                       au
                                                                                      ire
                  s




                                                   s




                                                                                                                                                                es
                                                                                                                                    lit



                                                                                                                                                   Sh
                                  w




                                                                        w
              rie




                                                  tie




                                                                                                                    Lo



                                                                                                                                    po
                                                                                     Sh




                                                                                                                                                                  l
                                                                                                      e




                                                                                                                                                               Is
                                 s




                                                                    s
                                               un
            ita




                                                                                                    f ir
                            rie




                                                                  tie




                                                                                                                                  ro
         un




                                           co




                                                                                                  d




                                                                                                                              et
                                                               un
                           ita




                                                                                               ne




                                                                                                                              M
                                         ire
      ire



                      un




                                                          co




                                                                                             bi
                                     Sh
    Sh




                                                                                        om
                                                        ire
                    ire




                                                  Sh
               Sh




                                                                                       C




C:\Docstoc\Working\pdf\500b7c2d-680b-4a22-83e5-01ba2d56855c.doc
                                                                                                                                                                                5

								
To top