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Rising inflation has devalued town halls' annual settlement from Whitehall by £500m, the LGA has claimed. Consumer Price Index inflation has jumped from 2.7% at the time that local government's Comprehensive Spending Review settlement was made last year, to 4.7% in August. According to the LGA, that means the real-terms value of the CSR settlement has fallen by 2% a year because of inflation – around £500m in spending terms. A wide-ranging assessment of the economic slowdown's impact on town hall finances, published by the LGA on 3 October, also reveals: l councils' fuel and energy bills are set to rise by £540m this year l school meal budgets have soared by £80m in one year, because of rising food prices l councils are being forced to bail out private bus operators to retain services l adult care costs are draining resources l social housing waiting lists have increased by four million in four years l council revenues from other services, such as parking, are likely to suffer. The LGA claims councils will be forced to find an additional £1bn in savings over the next three years to compensate for the financial pressures. Margaret Eaton, LGA chairman, said: ‘Times are tight for everyone, but the difficult economic environment is hitting town halls particularly hard. ‘In real terms, councils are now receiving almost half-a-billion pounds a year less in government funding than was planned in last year's CSR. ‘Councils are identifying ways to make sure these costs are not passed on to council taxpayers and keep vital services in place.'

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WHITEHALL

Inflation rise

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