Spending review for local government – main points

The Comprehensive Spending Review has confirmed that local government are firmly in the era of “less cash, more freedom”, with 26% cut in central funding over the next 4 years, but the end of ring-fencing for revenue grants.

The critical details will continue to emerge over the coming months, but the main points from Eric Pickles’ letter yesterday to LA leaders include:

  • Additional £2 billion to support adult social care by 2014-15, and increase in regional growth fund to £1.4 billion (from previously announced £1 billion)
  • Fund of equivalent of 2.5% council tax increase to those local authorities freezing council tax;
  • Ending ring-fencing of all revenue grants from 2011 (except for simplified school grants and the new public health grant to be introduced in 2013).  In total, local authorities will have greater control over more than £7 billion of funding from 2011-12 which is moving into formula grant, being unringfenced or is new funding for the SR10 period;
  • Shifts to many other budgets – including budgets for GPs and Police and Crime Commissioners – to the local level;
  • Plans to implement the first phase of Community Budgets in 16 areas from April 2011, by pooling departmental budgets at source for 16 places, to tackle families with complex needs, with the intention that all areas will be able to take this approach from 2013.
  • Reforms to the Housing Revenue Account, with greater local freedom and an additional £2 billion on Decent Homes in total over four years.

In return, local authorities must further improve working and focus resources by:

  • fundamentally re-examining every aspect of the way that councils work;
  • eliminating all traces of waste by becoming more transparent and improving procurement practice;
  • maximising efficiency and productivity, drawing on the lessons of the LGA-led productivity programme;
  • sharing departments, officers and back office services between different local authorities; and
  • bringing excessive senior pay under control.

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