“So we know what we know but we still don’t know what we don’t know,” is the Lib Dems view of the Chancellors ‘sleight of hand’ budget.  According to the Leader of the Liberal Democrats in Local Government Cllr Richard Kemp, Alistair Darling used smoke and mirrors to distract attention away from the grim reality of the cuts that were outlined in his pre budget review last winter.

“We have seen a little tinkering with local government and other budgets not of all of which are bad but what the Chancellor did not spell out was the fact that from the financial year 2011/2012 there will be big cuts in both the capital and revenue budgets. The budget contains ludicrous figures for income growth suggesting, for example, that the take from income tax will be 35% higher in 4 years time than it is now and that growth will rise to more than 3% – a figure that we have not reached for years and is unlikely given the ongoing problems with international capital finance. Even if we achieve these figures there will be total cuts at some time soon of 50% in capital budgets and 10% in revenue budgets. If health, schools and defence are to be ring fenced there will be cuts of between 15 and 20% of all other budgets including local government.

In particular there was too little emphasis on the findings from the Total Place activity. If we are to deal with cuts in income of the scale predicted fiddling around with the system and over 5 years moving some civil servants out of London just is not enough. We need to fundamentally reform the way we do business. We need to take an axe to levels of government, bureaucracies and quangos. We need to design all our services around the needs of the communities and individuals who need them most.

The will to make those fundamental changes is clearly lacking and people will suffer in the long term as a result of it.”

Budget key points for local government

  • The Government will work with local areas to run 11 Total Capital Asset Pathfinders, which will aim to improve the value of capital investments, help transform services and deliver better outcomes
  • The role of city regions in delivering growth and inclusion will be strengthened, and provide new flexibility for places to shape spending, including on skills. Newly empowered regional ministers will play a stronger role in regional planning and the allocation of funds to regions and city-regions
  • Regional Development Agencies, Homes and Communities Agency and Government Offices will be co-located
  • The Government will give local authorities new discretion over £1.3 billion of funding that is currently ring-fenced and reduce the number of funding streams from central to local government from 110 to 94. Alongside this the Government has reduced the set of indicators for local authorities by 18
  • a £120 million grant for Accelerated Development Zones
  • a £100 million fund to repair local roads following recent cold weather; and investing £250 million in the road network to improve capacity
  • a temporary increase in the level of small business rate relief for half a million businesses
  • extending the Young Person’s Guarantee after March 2011 to ensure that young people adversely affected by the recession continue to be guaranteed a Future Jobs Fund job, training or work experience if they cannot find work within six months;
  • frontline resource spending in schools will rise by 0.7 per cent in real terms; resource spending for 16-19s participation will rise by 0.9 per cent in real terms; and resource spending on Sure Start Children’s Centres will rise in line with inflation.
  • sufficient funding will be available to enable Police Authorities to maintain the current number of warranted Police Officers, Police Community Support Officers and other staff exercising police powers;
  • improved targeting of housing growth and regeneration funding, saving £340 million: including £40 million by concluding the New Deal for Communities, and a further £300 million from rationalising Regional Development Agency regeneration spending and programmes, including the Working Neighbourhoods Fund, the Local Enterprise Growth Initiative, and the Housing and Planning Delivery Grant
  • reducing unlawful occupation of social housing, saving at least £35 million in housing benefit costs; ending smaller Communities and Local Government (CLG) funded time-limited communities programmes, saving £25 million; and rationalising other smaller CLG programmes, saving a total of £160 million.
  • Budget 2010 announces that the Government is taking action to tackle excessively high Local Housing Allowance payments for a small number of tenants in the most expensive areas, saving another £50 million a year by 2014-15.

This brief has been adapted from a briefing provided by the LGIU for which we thank them.

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