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Double count casts doubt on funding figure

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Communities secretary Eric Pickles has been accused of getting his sums wrong amid claims that the 1.7% cut in spending power he announced in Parliament last month is actually 2.6%.

Analysis of the local government settlement data released just before Christmas appears to show that the government’s preferred spending power figure has double counted council tax support.

The finding casts doubt on Mr Pickles’ claim that councils will only be 1.7% worse off next year.

Shadow communities secretary Hilary Benn has reacted to concerns raised by local authorities and has called on the department to publish the correct figure after a re-calculation.

He said: “It is extraordinary that CLG ministers seem to have got their sums wrong. It is a shambles, and it’s no wonder they are so reluctant to admit this in public.

“They should now publish the correct figures so that councils can see where they stand and what the real reduction in spending power actually is.”

A spokesman for DCLG refused to respond to LGC’s request for an explanation of why council tax support has been counted twice within the spending power figure - once as the council tax support grant in the ‘start up funding allocation’ and a second time in the council tax requirement for councils.

The spokesman also refused to answer questions about whether the double counting was an error or intentional.

He instead suggested councils could raise the issue during the consultation on the draft settlement.

“Every year, we receive representations on all aspects of the provisional settlement,” the spokesman said.

“These are taken into account as part of the consultation process that leads to the final settlement.”

The double counting of council tax support is one of a number of criticisms of the spending power figure which are likely to form part of councils’ response to the settlement.

Elected members in Newcastle City Council were warned last week that DCLG figures showing a 1.5% cut in spending power could more than double to 3.9% once the double counting was taken into account.

Other concerns about the calculation raised at the authority’s full council meeting included the absence of previously announced funding cuts to homelessness prevention funding.

Newcastle city treasurer Paul Woods said these and other issues meant the spending power cut was “substantially higher” and he called for clarity.

“MPs have got to vote on [these figures] and we need the ministers to give accurate information,” he said.

Representations from other councils with similar concerns about their own figures led Mr Benn to lodge a written question this week demanding DCLG publish amended figures.

One local government finance director said: “There is some double counting going on and that has depressed the cut in spending power.”

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