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'NO FRILLS' SPENDING BID DISREGARDS£2.5BN SHORTFALL

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English councils delivered a 'no frills' budget submission to the DoE this week claiming they need£47.2 billion to...
English councils delivered a 'no frills' budget submission to the DoE this week claiming they need £47.2 billion to spend in 1997-98.

The bid, drafted by the local authority associations' expenditure group, calls for a £2.3bn or 5% increase in total standard spending. The government's TSS figure is £44.9bn.

But the relative modesty of the claim is emphasised by the fact that it excludes the current year's shortfall of £2.5bn, which the associations assume councils will continue to bridge by spending up to capping tolerances and drawing on reserves.

The submission states that the associations 'have reluctantly concluded' they cannot press for an adjustment to close the £2.5bn gap.

With the Treasury's strategy group reportedly looking for £6bn from the public purse to fund tax cuts, senior association members felt they were unable to produce a submission reflecting the spending requirements outlined by officers in a series of key service area reports.

The reports were billed as the 'sober assessments' of officers, unhindered by the members' 'wish lists', and designed to win 'third party endorsement' from the private and voluntary sectors. But senior councillors ended up trimming even these recommendations.

Association of Metropolitan Authorities chairman Sir Jeremy Beecham warned that government moves to cut the level of central support for councils would provoke an 8% council tax rise, meaning 'the pain will cut both ways for people who pay for and receive services'.

Sir Jeremy also said the continued failure to address the backlog of capital investment was a false economy which would hit revenue expenditure.

Of all spending gaps, councils are most concerned about social services, which they say faces a £1.1bn shortfall. The submission suggests a two-year phased redress, with an extra £665 million demanded in the first year.

Asked whether he was optimistic about this year's negotiations with the DoE, which begin with the Consultative Council on Local Government Finance meeting next week, Sir Jeremy said: 'With Tory MPs baying for tax cuts, I can't be too optimistic that the government will take the sensible long-term view instead of trying to save their necks.'

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