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COUNCILS FACE TOUGHEST FINANCIAL YEAR FOR A DECADE

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Ministers believe the Department of the Environment will be unable to win any increase in the£41.17 billion the go...
Ministers believe the Department of the Environment will be unable to win any increase in the £41.17 billion the government has estimated councils will need to spend in the current year, reports the Financial Times (p1).

The paper says ministers also believe councils will be lucky to avoid a reduction in that amount. Councils are already spending above government estimates.

Council leaders will use a meeting of the consultative council on local government finance tomorrow to press environment secretary John Gummer about next year's funding. They plan to point out that even with the government's lead in restricting pay rises, councils cannot set budgets at this year's levels without severe cuts in services.

Local government officials admit that even sympathetic DoE officials are not convinced that councils had a difficult times setting their budgets within this year's limits, says the Financial Times. Only three went through the formal process of having their budgets 'capped'.

The cabinet's public spending committee, EDX, is expected to meet every day this week, reports the paper. Treasury ministers are keen to reach a settlement by the end of the month.
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