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District councils have been hard hit by the local government finance settlement, with ‘floor' authorities facing a real-terms cut in their cash. A total of 60 districts will be on the funding floor for the next three years. They will be given 1% in 2008/09, and 0.5% for the following two years. For counties and single-tier authorities, the floors will be 2%, 1.75% and 1.5% for the next three years. Leader of South Lakeland DC, Brendan Jameson, said: ‘We had been expecting a tough settlement, but this is worse than anticipated. When inflation is running at around 3%, the grant increases represent significant underfunding that will lead to massive pressure on services.' Local government minister, John Healey, announced the settlement and warned local authorities to keep council tax down to ‘substantially below 5%'. He said: ‘This is a tight settlement for central and local government alike, but it is fair and affordable. Councils must balance their books, just like businesses but, rather than simply depending on government grants and local taxpayers, I want them to be more ambitious and innovative using revenue-raising powers such as trading, new business rate supplements, and the community infrastructure levy, as well as achieving efficiency savings of 3% a year to deliver a better deal for the people they serve.' Under the settlement, councils in England will get £70.4bn in 2008-2009, £73.5bn in 2009-2010, and £76.7bn in 2010-2011. LGA chairman, Sir Simon Milton, said it was the ‘worst settlement for a decade'. He promised councils would work ‘around the clock' to make sure council tax was kept down without damaging services. And Unison head of local government, Heather Wakefield, warned that councils were already seeing a ‘steady stream of redundancies' due to finance pressures, and the settlement would ‘make matters worse. She warned her members would not settle for a below-inflation pay rise.'

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FINANCE

Sixty districts 'hard hit' in real-terms cut

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