increase in Government grant for the second year running, with many
getting substantially more, local government minister Nick Raynsford
Mr Raynsford was publishing the proposed allocation to English local
authorities of the extra £340m of Revenue Support Grant for 2004/05
announced by the chancellor in the pre-Budget report yesterday. This
money comes in addition to the £54.1bn announced in the provisional
Local Government Finance settlement last month.
The increase in formula grant will now be 5.5% compared to 2003/04,
on a like for like basis. Overall grants will increase by 7.1%. This
additional money is not ring fenced, giving councils the freedom to
make their own spending decisions.
Mr Raynsford said: 'This is a substantial investment which will
further help councils to improve public services without imposing
unreasonable demands on their taxpayers. And there is scope for
councils to improve their efficiency savings. Put together, this
means local authorities must aim to deliver council tax increases in
low single figures next year.
'Unreasonably large council tax increases will neither be justified
nor acceptable. So the government is prepared to use targeted capping
powers next year. But we hope that will not be necessary.'
The main changes are as follows:
- Floors and ceilings on grant increases for authorities with
education and social services responsibilities will increase to
4.0% and 7.5% respectively. Some authorities will receive more than
7.5% because we are continuing to provide support for increased
capital investment outside the floors and ceilings system.
- For shire districts, the floor will rise to 3%, so all districts
get an above inflation increase. There will be no effective ceiling
for districts which means grant increases of up to 12.2% for some
There will be no changes in floors and ceilings for police and fire
The consultation period on the provisional Local Government
Settlement will be extended, given the scale of this change, and will
now end on 9 January 2004.
In addition to the extra funding announced in the pre-Budget report,
the statement on the provisional local government finance settlement
2004/05 stated that the Department for Environment, Food and Rural
Affairs will be reducing spending pressures on local government by
some £25m-£35m in the waste area next year. Some £10m of this will
come from deferring the introduction of the landfill allowance
trading scheme until 2005/06.
An announcement will be made by DEFRA on this shortly.