Councils hit by £127m cut in core funding

YORKSHIRE and Humber authorities face a further reduction in their spending power after the Government announced cuts which will cost the region £127m next year.

The Local Government Finance Settlement sets the spending power of local authorities and although there had been guidance issued in advance, councils had to wait until yesterday to find out exactly how much they would receive.

Yorkshire and Humber’s authorities must find savings of 2.5% while England’s councils have seen their funding fall by 2.1% on average, but that masks huge variance. Tewkesbury will receive an increase of 3.2%, but 20 authorities including Scarborough will receive 6.4% less than last year.

Of England’s 382 local and fire authorities, 130 will receive an increase in funding for 2015-16. Just one – North Yorkshire – is in this region, and its increase is the equivalent of just £16 per house. Surrey’s increase is £56 per house.

Yorkshire and Humber’s 22 local authorities must find another £127m of savings between them, with Sheffield (£21.5m), Bradford (£19.9m) and Leeds (£15.1m) worst hit in cash terms.

However, the savings will in reality need to be much greater because the “spending power” measure offsets the real total by including, for example, income from council tax and NHS funds. Although the exact impact of this will only be clearer following future announcements, North Yorkshire Council has said this will turn its £4m increase into a £21m decrease.

Local Government Minister Kris Hopkins told the House of Commons: “In the coming years, very substantial savings must be made in public spending. The government continues to need to take difficult decisions to put the public finances on a sustainable path.

“In the context of this unprecedented challenge to public finance, we have yet again delivered a settlement that is fair to all parts of the country – whether north, south, urban or rural.”

Mr Hopkins, the Conservative MP for Keighley, included examples from Barnsley and Kirklees to illustrate the opportunities and funding available to local authorities.

He said: “We have given councils a real stake in stimulating local growth. For 2014 to 2015, authorities’ own estimates show that 91% are expecting a growth in their business rates income – growth of £414m in total.

“This includes authorities such as Barnsley, who are predicting growth in their business rates income of around £900,000, and will also gain additionally from almost £400,000 of growth that they are predicting within their enterprise zone.”

Barnsley’s settlement will see it receive £5.6m less than last year.

Mr Hopkins also highlighted the role of transformation funds for projects that will improve services.

“Local authorities up and down the country are demonstrating real innovation,” he said. “I have seen for myself the work underway in Kirklees to support young people so they can make a good start in life. Our investment of £400,000 transformation funds will bolster the Kirklees Cares project where children in care are receiving peer support to prepare them for leaving care.”

Kirklees Council will receive £8.8m less in the next financial year.