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Councils' financial settlement unchanged?

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The Local Government Association’s senior finance official has predicted the Chancellor will leave the final year of the three-year financial settlement unchanged.

Speaking at the LGA’s executive meeting - and ahead of Alistair Darling's Budget - director for finance and performance Stephen Jones predicted ministers would plump for stability over the opportunity to claw back cash from councils’ 2010-11 settlement.

“From the statements we’ve heard from ministers about the value they place on the stability of the three year settlement, if I were a betting man - which I’m not - I would say a change to the settlement is unlikely,” he said.

Mr Jones, a former director of finance at HM Revenue & Customs, said councils should look out for any sign that the assumptions underpinning next year’s settlement were being changed.

The Chancellor could also indicate how much local government would be expected to contribute towards the extra£5bn efficiency target.

Mr Darling is not expected to give any indication of when the 2011-14 spending review is taking place although Mr Jones admitted “normally discussions would have started about how the spending review will be organised”.

However, he said councils should look out for “how much the chancellor will borrow, how long it will take to pay back and what the consequences will be for tax and spending decisions”.

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