News reports have claimed that Local Government Minister Grant Shapps has admitted that the poorest areas will be hit hardest by cuts.
This assertion has been taken out of context. A spokesperson for the Department for Communities and Local Government said:
The Minister’s quote was taken out of context. The average reduction in spending power is 4.4 per cent. The Government has also ensured that the most vulnerable communities are protected and that there is a fair distribution between different parts of the country - north and south, rural and urban, metropolitan and shire.
In the interview the Minister made clear that the Government has gone to ‘extraordinary lengths to try to put mechanisms in place to make sure that areas that are most dependent on central Government are protected the most from reductions.’
The local finance settlement:
- allocates a total government revenue grant of £72.7bn to local authorities in 2011-12
- distributes £29.4bn in formula grant in 2011-12 and £27.1bn for 2012-13
- keeps the average revenue spending power reduction for 2011-12 at only 4.4 per cent and reduces the upper limit from 8.9 per cent to 8.8 per cent
- increases transitional grant to £96m in 2011-12 and £21 m in 2012-13
- makes a further £10m available through formula grant to compensate shire districts for the loss of concessionary travel funding in 2011-12
- the Government has also funded a council tax freeze in 2011-12, by providing a £650m a year fund for local authorities over the Spending Review period