The Government’s Local Government Finance Settlement and its impact on Cornwall Council

The Government has just released its Local Government Settlement. The first thing Local Authorities have to do after the announcement is to decipher the Governments spin annoucement into reality of pounds, shillings and pence. That is not always easy, as the true details often come out in the following weeks and months. And by going by last years settlement, the Government announced its settlement, then promptly change it.

For Cornwall, the early indications are this what the Council expected. This means the Council’s Budget  for 2014/15 there will – hopefully – not  require much change. In other words, the cuts and reductions during this period will happen. If you haven’t yet realised this amounts to £196m  of reduced funding for the next fve years.

Now lets look at the ‘good’ news in this settlement. The settlement has allocated additional funding of £462k;  as the Government has finally smelt the coffee and realised providing services in rural area is more expensive.  This extra funding will be included within our Revenue Support Grant from (2014/15). Also there is an additional £467k New Homes Bonus monies as a result of Cornwall’s performance in bringing empty homes back into use.  

Now for the bad news. The Business Rates Top Up Grant will be £264k lower than the Council anticipated. The Council believes this is due to the increase in this grant also being linked to the cap on business rates at 2%.  The Council will await clarification on this matter. The Council tax base growth was 0.68% rather than the estimated 0.75%. This will result in £0.171K less income from Council Tax.

However, the real worry is the Governments intention to re-look at the Council Tax cap . Currently this cap is set at 2%, and if a Council wishes to raise Council Tax above this cap, then a costly referendum has to be held. Now there are hints comings from Government which could mean this cap being lowered. And in future this cap could include larger town and city council’s. This is very worrying, as whilst no-one want to raise Council Tax unnecessary, but sometimes it has to be done to continue to provide services. The Government is set to announce its decision early new year.

More details to follow, or a completely different settlement once the Government changes its mind like last year. But I hope this gives you an insight to the Governments announcement.

 

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