2016/17 Local Government Finance Settlement Nicola Morton, Head of Local Government Finance South East of England Councils, 22 March 2016 www.local.gov.uk
2016/17 Local Government Finance Settlement - Headlines • Core Spending Power will fall by 0.4% to 2019/20 – This definition includes councils’ ability to raise tax revenue as well government grant funding • Social care a priority • Revenue Support Grant – new method of allocations taking Council tax into account, and some councils will have “Negative RSG” in 2019 -20 • Offer to local government through to 2019/20 (subject to efficiency plan) – response by 14 th October 2016
Core Spending Power – all councils Final Settlement - February 2016 50,000.000 45,000.000 40,000.000 35,000.000 30,000.000 £m 25,000.000 20,000.000 15,000.000 10,000.000 5,000.000 0.000 2015-16 (adjusted) 2016-17 2017-18 2018-19 2019-20 Council tax at 2015-16 levels Modified business rates baseline Revenue Support Grant New Homes Bonus Improved Better Care Fund Rural Services Delivery Grant Transition Grant Total additional council tax
2016/17 Local Government Finance Settlement - Council Tax 1. 2% referendum limit 2. Additional 2% social care precept 3. Shire Districts able to raise by the higher of £5 or 2% 4. Assumed growth in core spending power: – 2 and 3 above – 1.75% pa for inflation (average forecast inflation to 2020), over 4 years – Growth in base extrapolated from last three years (est 7.8% in total)
Final settlement – additional resources (£m) 2016/17 2017/18 2018/19 2019/20 Total over period Transitional Grant 150 150 - - 300 Rural Services 60.5 30 - - 90.5 Delivery Grant Additional grants - 2.3 22.8 - 25.1 (negative RSG end for 2017-18 and 2018-19) Total extra cash 210.5 182.3 22.9 0 415.6 Additional £5 14.3 23.8 32.1 39.2 109.4 council tax Districts Total extra core 224.8 206.1 55 39.2 525 spending power
Additional resources in final settlement £m Transitional Grant 2016/17 2017/18 Rural Services Grant 2016/17 2017/18 Additional SFA to end negative RSG 2017/18 2018/19 Additional £5 flexibility for Districts 2016/17 2017/18 2018/19 2019/20 0 20 40 60 80 100 120 140 160 Rest of England South East
Change in Core Spending Power over SR period by region 4% 3% 2% 1% 0% -1% -2% -3% -4% London (excl East of England South East South West North East North West East Midlands West Midlands Yorkshire and GLA) Humberside 2016-17 2017-18 2018-19 2019-20
Core Spending Power per dwelling 2,000 1,800 1,600 1,400 1,200 £ 1,000 800 600 400 200 0 London (excl North East West Midlands North West South East East of South West East Midlands Yorkshire and GLA) England Humberside 2016-17 2017-18 2017-18 2018-19
2019/20 - Negative Revenue Support Grant Shire London Shire Shire Metropolitan Year Counties Boroughs Unitaries Districts Districts Fire Total 2019/20 11 3 8 146 0 0 168 South East 5 3 48 56 Table shows number of councils of each type who on current plans will have to pay over some local business rates because their core revenue support grant is “negative”.
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