The nation faces an unprecedented financial situation and every part of the public sector, including local government, which accounts for a quarter of all public expenditure, has a part to play in cutting the deficit.
Over 130 councils have already indicated that they will be taking up the government offer to fund a Council Tax freeze in April through its £650 million fund (see below). Authorities who do not increase their Council Tax are eligible for a grant worth 2.5% of their Council Tax.
Hammersmith and Fulham Council, the Royal Borough of Kensington and Chelsea and Westminster City Council have today (9 February 2011) reached a landmark agreement to combine back office and management that will save £35 million a year by 2014 to 2015 protecting the frontline services and electoral sovereignty.
Watch a video of the minister’s statement on shared services
1 council signed up to the Council Tax freeze initiative is West Norfolk who are also freezing car parking charges and councillor allowances, keeping bin collections weekly through a new shared service agreement with North Norfolk District Council and due to start in 2013 that will save £400,000.
Ryedale District Council, which is also freezing Council Tax, is only facing a single cut to its service next year - scrapping their taxpayer funded newsletter.
Kettering Borough another ‘can do’ council, has created a 1-stop shop so residents have easier access to 18 of its vital public services all conveniently placed under 1 roof - reducing its building overheads.
Reading Borough Council has increased what it gives to voluntary and community groups by an extra £220,000 taking its total funding to over £7 million because of the huge contribution they make to the town’s success.
Local Government Secretary Eric Pickles said:
“I welcome the news that already over 130 ‘can do’ councils are planning to take part in the government’s £650 million Council Tax freeze initiative.
“And it is great to see 3 big London councils lead the way sharing senior staff and back offices, saving taxpayers millions of pounds and showing its possible to do more for less and protect frontline services in the process.
“This shows that local authorities can keep taxes down and protect frontline services. Driving down the nation’s deficit is the governments biggest priority but we have made sure that extra money is available to protect the public from Council Tax rises offering real help to hard working families and pensioners.
“The new localism powers and spending freedoms we are handing councils will help them be as efficient and effective as possible.”
A fair and progressive funding settlement for councils that protect front-line services and shields the most vulnerable communities with significant social challenges was confirmed last week. For example, residents in Hackney will receive £1043 per head and those in Wokingham will receive £125 per head.
£29.4 billion of council grant has been fairly distributed between different parts of the country - north and south, rural and urban, metropolitan and shire. As a result councils will only see an average 4.4% reduction in revenue spending power and none will now face more than an 8.8% fall.
Local authorities have already been given full control over £7 billion of funding, all non-schools ring fenced grants have been removed, councils and the NHS are being brought closer together and the bureaucratic burdens associated with inspection and targets have been removed.