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FUNDING BOOST FOR LOCAL AUTHORITIES - RSG CONFIRMED (ENGLAND)

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Local government minister Nick Raynsford today confirmed that local authorities will receive over£47bn of governme...
Local government minister Nick Raynsford today confirmed that local authorities will receive over£47bn of government grant in 2002/03. This represents a funding increase of 7.5% or£3.3bn.

This follows a period of consultation with local government on the provisional allocations announced in December, and incorporates the promise of an additional£27m to guarantee that all shire district councils, police and fire authorities receive a minimum increase in grant of 2.3%.

Other changes reflect more accurate data that have become available since the provisional settlement.

Nick Raynsford said:

'This year's settlement provides a good increase in money for local authorities. For the first time every local authority has been given a grant increase at least in line with inflation and in many cases much higher. This will allow councils to improve services while setting reasonable council tax increases. There should be no reason for big increases. The government has increased money for local councils by 20% over the last four years.

'This year, bills show clearly how much different tiers of authority are charging and by how much they have increased their part of the council tax. If any councils set substantial increases, their taxpayers and local electorate will have every reason to question their council's decision.'

The full text of the parliamentary answer is attached.

Notes

The provisional local government finance settlement was issued for consultation on 4 December 2001, and updated information on grant allocation was published on 15 and 28 December.

Today's figures are available on the DTLR website.

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HOUSE OF COMMONS WRITTEN PARLIAMENTARY QUESTION

Phil Hope (Corby)

To ask the secretary of state for transport, local government and the regions, what representations he has received on the local government finance settlement for 2002-03; and what conclusions he has reached.

Mr Raynsford

I have today laid before the House the Local Government Finance Report (England) 2002/03. This report establishes the amounts of revenue support grant (RSG) and non-domestic rates (NDR) to be paid to local authorities in 2002/03, and the basis of their distribution. A draft of this report was issued for consultation on 4 December 2001, and updated information on grant allocations was published on 15 December and 28 December. The Department received a total of 386 written representations within the consultation deadlines from the Local Government Association and the Association of London Government, as well as from 334 local authorities, local authority groups and Honourable Members.

Having considered the views of the local authority associations and other who have commented on my initial proposals, I have decided to make two main changes to my original proposals on grant distribution.

I have introduced an alternative baseline for 2001/02. This change, in effect, adjusts only for the transfers of service for which shire districts, police and fire authorities are responsible. In order to guarantee a minimum 2.3 per cent increase, I have given these authorities whichever increase is greater - 2.3 per cent on the original baseline, or 2.3 per cent on the alternative.

I have also made a change on the basis of the adjustment for the National Care Standards Commission transfer. We have concluded that it is correct to only adjust for the existing cost of local authority activity in this area. Otherwise, this change would have had adverse impacts for a number of authorities and after careful consideration, I have added extra money into the settlement to ensure that these authorities are reimbursed for the cost of this change.

No local authority loses out as a result of these changes as I have added some£27 million to the total of RSG and NNDR I announced on 4 December.

In addition, the final figures published today reflect the more accurate data that have become available since we published our proposals.

This year's settlement provides a good increase in money for local authorities. For the first time every local authority has been given a grant increase at least in line with inflation and in many case much higher. This will allow councils to improve services while setting reasonable council tax increases. There should be no reason for big increases. The Government has increased money for local councils by 20% over the last four years.

This year, bills show clearly how much different tiers of authority are charging and by how much they have increased their part of the council tax. If any councils set substantial increases, their taxpayers and local electorate will have every reason to question their council's decision.

I shall be sending copies of this report and a guide to the settlement to all authorities, together with tables showing each authority's Standard Spending Assessment and its entitlement to RSG and NDR. Copies of the report, tables, and the guide are available in the Vote Office and the Libraries of the House.

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