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MPs attack ministers over 2.3% spending cut claim

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MPs have attacked ministers’ failure to explain how a calculation that local authority “spending power” would fall by just 2.3% this year was reached.

A statement from the communities and local government committee, chaired by Labour MP Clive Betts, accused the government of a “repeated failure to set out the full calculations behind its claim in the 2013 spending round, and repeated by the chancellor and prime minister, that local government expenditure would fall by only 2.3% in real terms between 2014-15 and 2015-16”.

It said the absence of an explanation, from both communities secretary Eric Pickles and chief secretary to the Treasury Danny Alexander, meant “the committee and the public have had no opportunity to scrutinise properly the proposed local government funding reductions”.

In the statement Mr Betts said: “Over recent years, the government has produced an array of different figures on local government finance. 

“Ministers have to stop quoting whichever figure best suits their argument on any given occasion.

“The government’s established ‘spending power’ measure shows a real terms reduction of 3.3% between 2014-15 and 2015-16. 

“The Treasury, however, chose to invent a new measure of local government spending, which purported to show only a 2.3% real-terms reduction. In spite of my repeated requests, the government will still not provide a full breakdown of how this figure was calculated. My committee cannot carry out effective scrutiny if the government chooses to play fast and loose with important data on public funding.”

A Department for Communities & Local Government spokesman said: “The local government settlement for 2014-15 has been published in full since February, which clearly shows how individual councils’ spending power was calculated. This department has used the same approach for each settlement since 2010.”

According to the department, the average spending power reduction for councils in 2014-2015 will be 2.9% per household.

The DCLG spokesman said “spending power” was made up of estimated council tax and business rate income and a number of government grants paid to councils by central government departments.

However, he added that the 2.3% figure was a Treasury “local authority spending figure”, which was “an approximation of the total potential amount of funding available to councils in 2015-16”.

He said: “The figure is not the same as our spending power figure as it was calculated using a different methodology and was based on assumptions made at the time of the spending round.”

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Readers' comments (1)

  • ... was a Treasury 'local authority spending figure' which was 'an approximation of........'. In other words, it was made up. If the DCLG spokesperson is able to assert that '...it was calculated using a different methodology....' then presumably s/he has seen the methodology? So, why is it being withheld?

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