Local government facing 'funding shortfall'

Thursday, 21 October 2004 2:00 AM

The Local Government Association (LGA) has claimed that there is a "huge" funding shortfall facing local government.

The full extent of the central government grant to local councils will not be known for a number of months, but the LGA claims that suggestions from Ministers that the Government will impose a cap on council tax rises reveals that Ministers know of severe cost pressures on local government. In particular, what they claim is an unfunded £1 billion of central spending commitments, which will have to be implemented by local authorities.

Sir Sandy Bruce-Lockhart, the LGA's chairman, claims that the Government are working on a rise in council tax of 6.7 per cent, which with the additional responsibilities would mean an average of 10 per cent.

He warned that many councils will conclude that the rise is too high and be forced to cut vital services.

Speaking this morning, Sir Sandy said: "The Government is underfunding public services while knowing its promises can only be delivered through higher council tax. It hopes the public won't notice the effects on services until after a general election.

"Local councils, and the public, want a clear assurance that Government will match its spending plans and pressures with grant. Threatening councils would not help. The alternative to Government grant which does not match Government spending plans can only be higher council tax or cuts in services.

He added: "Local government has been producing significant efficiency savings every year for the last few years and will meet the £6.45 billion in efficiency savings identified for the next three years. At the same time, as the Independent Audit Commission has shown, Councils continue to improve their performance. In return we ask for the proper funding of Government spending plans."

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