Local Government Finance 2010-11

I have today laid before the House the Local Government Finance Report (England) 2010-11. This report establishes the amounts of revenue support grant (RSG) and non-domestic rates (NDR) to be paid to local authorities in 2010-11, and the basis of their distribution. A draft of this report was issued for consultation on 26 November 2009. We received a total of 65 written responses from 58 individual authorities and formal and informal groupings of authorities during the consultation, and I met delegations from the Local Government Association, London Councils, and the County Councils Network. Having considered the views of the local authority associations and others who have commented on the provisional settlement, I have decided to confirm my proposals on the basis of distribution of formula grant for 2010-11. The final figures published today for 2010-11 confirm those originally published in January 2008. In line with Government's policy on multi-year settlements, it has always been clear that the settlement for 2010-11—as the third year of a three-year settlement—would not be changed from that previously published other than in exceptional circumstances. Having fully considered all the representations received during consultation I have not found such exceptional circumstances. The overall settlement represents a continued real-terms increase in investment in local government, which will allow authorities to continue to deliver improving services at an affordable cost. Total formula grant for 2010-11 will be £747 million, or 2.6 per cent., higher than in 2009-10 on a like-for-like basis. Specific grants, such as the Dedicated Schools Grant, are on top of these figures and bring the total increase in funding for local authorities to 4 per cent. in 2010-11. In our first 10 years up to 2007-08 we increased total Government grant by 39 per cent. in real terms. This provided 10 straight years of above inflation increases in Government grant for authorities overall. Over the current spending review period, we are providing an additional £8.6 billion to local government, an average 4 per cent. cash increase per year. I have also laid an order for the House's approval to cap Warwickshire police authority in advance for 2010-11, at a budget requirement which equates to council tax increases of around 3 per cent. in both 2009-10 and 2010-11. I am also putting all authorities on notice that the Government will not hesitate to cap any excessive council tax increases set by individual authorities in 2010-11 and that it would be a mistake for any authority to presume they will not be capped if they stay within the capping principles which applied in 2009-10. We have already initiated capping action against three police authorities in advance for 2010-11 to limit their council tax increases to around 3 per cent. No other decisions have been taken on capping for 2010-11, but we have made clear that we expect the average Band D council tax increase in England to fall to a 16-year low. The Government have maintained the three-year settlement in challenging economic circumstances and there can be no excuse for any authority setting an excessive council tax increase in 2010-11. I shall be sending copies of the Local Government Finance Report to all local authorities in England, and making available full supporting information on the Communities and Local Government website at: http://www.local.communities.gov.uk/finance/1011/grant.htm. Copies of the report and related tables showing each authority's allocation of formula grant and other supporting material have been placed in the Vote Office.