20/11/03 - County Council's Grant Settlement

Cumbria County Council has fared in line with the average county in the draft Revenue Support Grant settlement announced on 19 November.

Cumbria County Council Deputy Leader Mike Ash says

“The Local Government Finance Settlement for Cumbria County Council announced by Government yesterday highlights the problems faced by a Council wishing to keep Council Tax rises to an affordable level.  

Government grants for this Council are set to rise by £17m (or 5.6%) from £294m to £311m. This is more than general inflation, but we are also being expected to increase our overall spending on services by a similar percentage.  We are 17th out of 34 in the league table of English counties assumed spending increases, ie exactly in line with the average shire county. 

The Government assumption is that the amount raised by Council Tax in Cumbria will increase by an average 5.3% next year, with a 6.4% increase in spending for Education and 7% increase for Social Services.  Cumbria’s figures are above the national average for Education and Social Services.  However, there are a number of real pressure areas. Once again the amount of money given for Highways has fallen – this year by 6.3%.  Another £1.3million off the highways budget after last year’s cut in Government funding of £5.6million.  And for the Fire Service it is just as bad.  The total increase in money for the Fire Service is about £500,000 – but the increase in pay for the firefighters is over £1million.

Because of the Government’s strict passporting rules and their expectations about how money is spent there is very limited discretion about how the Council can redistribute money between services, causing yet more problems.

The Government is continuing the trend of shifting the burden of taxation from Central Government to Local Government, from Income Tax to Council Tax.  This means local Councils and the local Council Tax payer are paying for promises made by Central Government.

The present system of Council Tax does not take account of people’s ability to pay, which means those on fixed and low incomes are particularly affected by any above inflation rises.  And these people are seeing an increasing proportion of their income being eaten up by Council tax.

Given the constraints faced by Local Authorities, the settlement we have received from Government and the specific pressures facing Cumbria, we cannot guarantee to keep any increase in Council Tax to rates of inflation.  Indeed, Government figures expect increases will be above the rate of inflation.

We have been working hard over the past months to identify areas where we can provide efficiencies.  This aims to ensure that we deliver the services that the people of Cumbria deserve but also keep any Council Tax increase as low as possible.”