'The extra £340m for local authorities in 2004/05 announced by the
chancellor today further demonstrates the government's commitment
£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
'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