Published on Tuesday, 3rd January 2017


The annual spending settlement for local government was released just before Christmas and it contains few surprises. Last year the government offered all local authorities a guaranteed level of funding for four years and the latest settlement is in line with those promises.


In order to access the four year guarantee, councils had to submit efficiency plans and had to request that they wanted a guaranteed deal. Almost all did this, with only five of England’s 300+ local authorities refusing the offer. The two known hold outs are Lancashire and Surrey County Councils, both of which are in particular trouble, with the former burning through reserves at an alarming rate and the latter reportedly contemplating a 16% council tax rise.


Portsmouth City Council was one of the overwhelming majority that signed up for a deal, with the decision taken by full council in the autumn. I try not to make these posting partisan, but it was really disappointing that the Liberal Democrats pushed for the council to refuse it, so they could claim to be against austerity. The reductions in funding for local government are universal and nowhere has the option of just opting out and it is simply false to claim otherwise. Labour also abstained, but thanks to support from UKIP, the vote was passed and the council has accepted the offer of a four-year settlement.


Now that the settlement has been published, it is possible to compare the actual figures for those councils that refused the deal with the offer they were made a year ago. The numbers are identical. 


Guaranteed levels of income make planning considerably easier and also make it possible to operate with a lower level of reserves. There is still going to be further pain for local government, but having surety of what the numbers are going is helping Portsmouth City Council plan its finances on a two-year basis rather than the traditional one.


Tags: Budget