It's January, and we're all feeling a little light in the pocket – and that's certainly the case for most London boroughs. With a whopping 82% of the capital's councils falling below the grant floor, times are certainly tight. Ealing, like many boroughs, has seen a large increase in economic migrants, and this places huge calls on our core services. In addition, I'm pleased to say our older people are living longer, but sadly, the Government's formula for calculating our grants didn't take this into account. Like other authorities, we were pleased to learn that the schools' ICT grant was untouched this year. But, just when we thought we'd escaped the highway man, he came at us from another direction and pinched our pupil increases capital grant for building new classrooms, saying we would get the money to pay for our borrowing through our grant. But it's simply impossible for us to take advantage of this ‘generous offer'. This year, the Government's magic formula calculated that we should receive £10m less than last year. Even ministers knew they couldn't get away with that, so for authorities whose grants were calculated as being lower than their entitlement, the Government agreed a 2% increase. The problem is that because we're below the floor, we can't benefit from supported borrowing. Basically, we'd never see any of the money because it would be deducted from the £10m. The whole problem would be solved if the Government switched from its so-called supported borrowing to direct capital grants for everything. But that would spoil the illusion. Through a process of smoke and mirrors, the Government gets to announce generous grants, which don't actually cost it anything. Meanwhile, local council taxpayers end up footing the bill. Richard Ennis is director of finance at Ealing LBC
