Civil servants have been quizzed again over disputed claims that council tax support will be further reduced in the last year of the spending review.
Finance officials met with Department for Communities & Local Government officials on Monday and discussed last week’s row during which the government and LGA clashed over claims council tax support funding would be cut by 8.5% in 2014-15.
While LGA members said the cut had been twice confirmed by DCLG officials, their publicising of the reduction was immediately corrected by DCLG which said it was “totally untrue” and pointed to settlement documents which showed the funding would be £3.3bn in both years.
The confusion appears to have arisen because council tax support funding in 2014-15 is due to disappear as a single line of funding and be rolled into formula funding which the LGA estimates is due to fall by around 8.5% in that year.
Following last week’s row during which DCLG emailed all councils to clarify the position while LGA members accused ministers of “backtracking”, finance officers met this week with civil servants and questioned what the maintenance of council tax funding within formula funding meant for the scale of reductions to the rest of formula funding.
One local government attendee who did not want to be named said: “We were all making this point that government cannot have its cake and eat it. We either have to accept that the rest of formula funding is being cut by more if council tax support is being protected, or council tax support is being cut.”
He estimated that a 10% reduction in formula funding between 2013-14 and 2014-15 would increase to 12% if the council tax support funding element of formula funding was accepted as constant at £3.3bn in both years.
“If government is putting [council tax support] into a block of money and calling it formula funding - and it is not ring-fenced and they are not going to break it down for us - they need to stop saying they are protecting council tax support,” he said. “Local decisions about funding allocations need to play out and ministers need to stop interfering.”
Last week’s row broke following a meeting between LGA officials and elected members and DCLG ministers and officials during which questions were asked about whether council tax support funding would be separately protected in 2014-15. Attendees told LGC the answer led them to believe it would not be protected and would be subject to the same 8.5% cut the LGA has estimated will be applied to formula funding.
Sharon Taylor (Lab), leader of Stevenage BC and chair of the finance panel, told LGA’s executive meeting this had been “verbally verified” by DCLG when local government officials double checked after the meeting.
LGC’s account of her comments made at the LGA’s executive meeting led DCLG to correct the claims via Twitter and email councils with a clarification. “There is no reduction in the overall funding for council tax support for 2014-15,” the email said, pointing to the “key table three” settlement documents for each year showing council tax support static at £3.3bn.
“From 2014-15, the level of council tax support funding and formula funding combined will be scaled back for individual councils according to their combined spending trajectory, by service tier,” the email explained.