Title

Local government minister, John Healey, has pledged there will be no cuts in central grants funding due to deteriorating public finances. The minister also warned this week there would be no increases to meet inflationary costs, and instead urged councils to be more innovative about finding new revenue streams. Mr Healey told an NSA/The MJ conference on Tuesday: ‘Responding to the credit crunch has required government action on a unprecedented scale. ‘Any ideology which now advocates a smaller state would fail the public, and there is a need for an active public sector.' But he said the three-year local government settlement meant real increases, adding: ‘There will be no additional government money to deal with contingency problems. The three-year settlement is designed to deal with pressures. I'm aware that it is tough for local government, but councils have to manage as best they can. They have to face up to difficult decisions, but at least they have a three-year timeframe in which to do so.' Asked if ministers were tempted to revisit the three-year settlement and cut grant, Mr Healey replied: ‘The prize of coming to an agreement with local authorities far outweighs any value of altering the settlement at the margins.' But, he insisted councils must ‘make use of the freedoms they've got', and added: ‘Only 20% of councils are charging to their full potential, and half have no clear policy about charging powers. Only 60% have used prudential borrowing introduced in 2004.' CIPFA president, Caroline Mawhood, has urged councils to ‘argue positively for council tax'. She told the conference it was ‘a fundamentally good tax' which needed reform rather than abolition. ‘Local government needs to sort out its script and argue positively for council tax,' she said.

Title

WHITEHALL

No cuts in central grant says Healey

SUBSCRIBE TO CONTINUE READING