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Councils should be allowed to spend the money left over from government departments to cover the funding shortfall ...
Councils should be allowed to spend the money left over from government departments to cover the funding shortfall in social services, according to the Local Government Association.

The Association of Directors of Social Services and the two societies of county and municipal treasurers are to carry out a survey to show how much councils are overspending their social services budget.

LGA chair Sir Jeremy Beecham said: 'Local authorities are already spending more than£1bn over their spending allocation to meet growing demands. The extra£300m to help councils relieve winter pressures will go some way to addressing this problem, but it is simply not enough.

'We have therefore pressed the government to consider boosting the allocation for social services from potential underspend in this financial year by the health department and DTLR.'

LGA political group leaders met local government minister Nick Raynsford and health minister Jacqui Smith to discuss the finance settlement (LGC, 11 January).

The government is facing criticism for not providing any new money for social services in the recent revenue support grant settlement (LGC, 7 December 2001).

Figures from the Institute for Fiscal Studies reveal public spending could rise by more than 10% if government departments use their underspend.

IFS senior research economist Carl Emmerson said: 'Government departments have amassed a substantial underspend. The reasons for this are not really known. It might be that they are spending very wisely, but it might be that they are having trouble getting projects under way.'

The DTLR is one of the biggest underspenders with a shortfall on last year's main programmes of around£860m.

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