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STEP-CHANGE IN FUNDING FOR LOCAL GOVERNMENT IN WALES CONFIRMED

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Funding for local government in Wales will significantly increase in 2002-03 assembly minister for finance, local g...
Funding for local government in Wales will significantly increase in 2002-03 assembly minister for finance, local government and communities Edwina Hart has announced.

Unveiling the Welsh assembly government's local government revenue settlement for 2002-03, Mrs Hart said: 'This excellent settlement, which increases the assembly's grant support for councils in Wales by more than 8 per cent, will boost public services and improve the quality of life for the people of Wales.

'In 2000-01, the assembly's grant support for local government in Wales was£2,594m, adjusted for transfers of responsibility. This is rising massively to£2,899m for 2002-03, excluding extra support for new burdens; so on a like-for-like basis funding has gone up by over£300m in two years. This is a rise of 11.7%, or almost 7% real growth over and above inflation, taken over the two years.

'This clearly demonstrates the assembly's determination to release substantial new resources for the future of modern Welsh public services.

'I want to make it absolutely clear that revenue settlement resources are not earmarked by the assembly for any particular purpose. There is a clear agreement with local government that in return for greater freedom and responsibility to determine their own expenditure on different services, they must deliver on key outcomes in areas that are top priorities for the Welsh assembly government.

'I am also announcing the final settlement earlier than in previous years, to give local authorities greater time to plan their budgets, and making available details of all specific grant allocations and the timing of their allocation to local government for the first time.'

Also announcing the amount of general capital funding each county and county borough council will receive in 2002-03, Mrs Hart said: 'The final settlement provides assembly support for local government capital expenditure in 2002-03 of£507m. This is an increase of over 17 per cent over and above published plans for 2001-02.

'An extra£13m on top of this is being made available to local government in 2002-03 for e-Government projects, strategic waste disposal projects, and for projects aimed at repairing damage caused by the severe weather at the end of 2000. A further£42m is being made available to local authorities by way of specific grants where it is not currently possible to quantify the split between revenue and capital.'

The national assembly will debate the revenue settlement on 24 January, when it is invited to approve the Local Government Finance Report for the next financial year.

Notes

There are significant transfers into and out of local government revenue funding in 2002-03. Some£85m will transfer to ELWa in respect of post-16 education, whilst£38m will be transferred to local authorities from the department of work and pensions to cover the costs of ending preserved rights to income support and the phasing out of the residential allowance. I am also adding a further£1.2m for Supporting People, and£2.6m of unhypothecated resources that authorities may wish to use to augment general social services expenditure.

A further£4.75m is being provided in the form of transitional grant specifically to moderate the impact on council tax rises of the new Standard Spending Formula introduced in 2001. Four authorities - Merthyr Tydfil, Blaenau Gwent, Neath Port Talbot, and Anglesey - will benefit from this.

Some changes have been made to the amount of revenue support grant to be paid to local authorities since the provisional settlement announcement. However the overall effect of the changes has been 'relatively' small and nominal changes authorities standard spending assessments (less than 0.5% for each authority). These have mainly arisen from the following items:

* debt-financing changes for Neath, Torfaen, Rhondda Cynon-Taff and Powys

true tax base figures now available

* police authority figures have been updated following the home office's provisional settlement announcements

* transfers in for Withybush aerodrome, Stop Now and Magistrates courts

* population dispersion indicators amended

* transfer out of Syniad funding and regional transport co-ordinators

The overall support which the assembly is providing for local government capital expenditure in 2002-03 will increase by over 17% to£507m. Of the£507m,£276.6m has been allocated for general capital funding. This represents an increase of 2.8 per cent over the general capital funding issued for 2001-02 and therefore continues to enhance local flexibility, as it is up to each local authority how its individual allocation is used.

Overall, assembly revenue support for councils, including specific grants, is set to increase by 8.23 per cent.

Real growth represents increases over and above general inflation measured by the GDP indicator. The gross increase in assembly funding for authorities from 2000-01 to 2002-03 is 11.75%, equivalent to 6.6% real terms growth.

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