Council settlements down 4.4%

The average local council will have its government funding reduced by 4.4% in 2011-12, although some will suffer cuts of 8.9%, the secretary for communities and local government, Eric Pickles, has announced.

No local authority will face a cut of more than 8.9% over the next two financial years, he added, in an address to parliament.

October’s comprehensive spending review resulted in the chancellor George Osborne cutting local authority budgets by 7.1% per annum for the next four years. Today’s settlement includes £29bn of funding to local authorities in 2011-12 and £27bn in 2012-13.

The cuts could lead to councils facing a funding shortfall of £6.5bn over the next year, according to the Local Government Association (LGA).

“This is the toughest local government finance settlement in living memory,” LGA chairwoman Margaret Eaton said. “Councils now face incredibly tough choices about the services they continue to provide and those they will have to cut.”

Councils will be told their exact settlements individually, but the department for communities said it would offer those in the poorest areas of the country more money per head than those with lower levels of need.

Areas most dependent on central-government funding have been “insulated” from cuts through the creation  of four separate grant bands or “floors”.

Pickles said the settlements were “democratic”, but Labour shadow ministers warned that the cuts would be damaging to services and local communities.

Museums are discretionary services for local authorities, and many fear their budgets will be significantly slashed as a result of the settlement.

The settlements coincide with a Localism Bill, which pledges to devolve central power for local spending and give councils and communities more freedom to run neighbourhoods.

The bill sets out new rights for local people, including powers to challenge how services such as libraries and transport are being run, and potentially take them over. Meanwhile, reforms to the planning system could lead to communities being given the power to grant planning permission.