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COUNCILS 'SHORT CHANGED' BY GRANT SYSTEM

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Council budgets are increasingly the result of central government decisions, with some areas particularly harshly t...
Council budgets are increasingly the result of central government decisions, with some areas particularly harshly treated by the system, a new report by the Local Government Information Unit says.

In 'The grant gap' the LGIU looks at how much the government thought councils needed to spend in 1986-87 and how much it thinks they need for 1993-94. The increases allowed to councils have been compared, and these show some dramatic differences which cannot be accounted for by factors such as population change, the LGIU says.

For example, since 1986-87 Leominster DC has been allowed to increase spending by 147%, yet Middlesbrough BC has only been allowed an 18% increase.

If an individual standard spending assessment is an overestimate of spending needs it will act as a hidden subsidy to a council, whereas if it is an underestimate local tax bills will have to rise or services will have to be cut, the LGIU says.

LGIU Chair Phyllis Starkey said: 'This report demonstrates that some councils have profited greatly at the expense of others which have, on the face of it, equal or greater needs.

'It is further evidence that the whole system of local government finance needs to be reviewed and overhauled. The starting point should be a fair method of distributing grant, based on real spending needs and local priorities'.

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