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PRE-BUDGET REPORT: EXTRA RESOURCES FOR LOCAL AUTHORITIES

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Statement from the deputy prime minister: ...
Statement from the deputy prime minister:

'The extra £340m for local authorities in 2004/05 announced by the

chancellor today further demonstrates the government's commitment

to investment in public services. It comes on top of the additional

£420m of grant support for local authorities which we announced in

the provisional settlement last month.

'It means we are now making available a full £760m in grant beyond

what the last spending review originally set aside for local

authorities. And it means that next year we will be providing total

support to local authorities of £54.5bn - up from £50.8bn for

2003/04 on a like for like basis. That represents an increase, in

real terms, of 30% in central government support since 1997 and this

is the second year in succession that all authorities have received

an above inflation increase in government grant.

'Taken together with the further £750m reduction in ring fencing

that we announced in November, the additional support we are

providing underlines our commitment to ensuring that local

authorities can provide decent local services without making

excessive demands on local tax payers.

'The government, and council tax payers, now expect local authorities

to deliver. Given this significant investment in local services and

the scope for efficiency improvements, it is my view that next year

local authorities can and should deliver council tax increases in low

single figures.

'However I repeat today that authorities - including police and fire

authorities - must be in no doubt that I am prepared to use my

capping powers next year if that proves necessary.

'When considering whether to cap authorities, I would have to look at

the excessiveness of the budget. I would also expect to look at the

size of the council tax increase. But it may well be appropriate to

consider other matters such as how acceptable the rise in council tax

is locally. Council tax payers do not want another round of high

increases. If their councils think they do, why don't they allow

local people to have their say in a local poll? The views of local

people, if clearly expressed in a local poll, are a factor I would

consider.'

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