03/12/03 - Government's Cash Settlement not all it seems

Deputy Leader of Cumbria County Council, Mike Ash has today warned the public that the Government’s annual cash settlement for County Council services is not all it seems. Whilst the overall increase in Government grant looks satisfactory, the impact of passing large increases to Education and Social Services will severely restrict the help the Council can give to its other services.   

His warning came at a meeting of the Council’s Cabinet today who considered a report by the Council’s Director of Finance that details the issue.

Councillor Ash explains:

“The County Council’s Director of Finance has made it clear that the settlement’s headline figures are in line with the national average for a Shire County.  However once you get below the headline figures it is evident that the Government’s insistence on ‘ringfencing’ money has created some real problems for the County Council’s budget.

Cumbria received a total of £16.4 million extra in grant from Government, however they also insist that we pass £13.7 million, 84% of the total grant received, straight to schools. As the Schools money makes up about half of the County Council’s budget, this means that only £2.7 million of extra grant can be spent on the remaining half of the Council’s services.

Put another way, if you remove the increase in the money for school’s from the equation 

then, instead of the 5.5% increase in spending being trumpeted by Government, the Council has actually only received a rise of 4.3%.

And if the Government’s and the public’s expectations about passporting increases for Social Services is met then the rise for all other services is actually only 2%!

No-one objects to the Government making Schools and Social Services their priority.  We have already invested way above average in both of these areas.  But what does cause significant problems for Councils across the Country, including Cumbria, is that the Government is doing it at the expense of other services.”

“So despite the headline figures, the Council is faced with many very difficult decisions about how to preserve services and keep Council Tax level down to the level required by Government.  These are decisions that the Council’s Administration will face up to, but the public has to be aware that everything is not as rosy as some people would make out.  Tough times may lay ahead.”