Councils team up to issue cash warning

COUNCIL leaders have warned there is an unprecedented threat to future services if the Government continues to deliver “poor” funding settlements.Leaders of all councils across East Anglia have written a joint letter to Deputy Prime Minister John Prescott claiming this year's proposed budget would result in “serious damage” to strategic services now and in years to come.

By Danielle Nuttall

COUNCIL leaders have warned there is an unprecedented threat to future services if the Government continues to deliver “poor” funding settlements.

Leaders of all councils across East Anglia have written a joint letter to Deputy Prime Minister John Prescott claiming this year's proposed budget would result in “serious damage” to strategic services now and in years to come.

The move comes just days after Suffolk County Council outlined swingeing £24million cuts and jobs losses, with adult social care the hardest hit.


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Suffolk has received a 2.9% increase in its grant towards council services from April 1 and has been told by ministers that it can expect a 5% increase for the financial year 2007-08.

The settlement has forced council bosses to make more than £14m cuts in adult social care, including the introduction of day care charges for people with learning difficulties.

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It has also slashed cash support for foster carers by £393,000 and £685,000 from the roads maintenance budget.

Meanwhile, the settlement awarded to Essex County Council for 2006 by the Government was £202.2 million - an increase of 2.8% on the previous year.

The authority - recently awarded four out of a possible four stars by the Audit Commission - will get £206.9 million earmarked for 2007/2008.

The letter, which was signed by the leaders of Suffolk, Bedfordshire, Cambridgeshire, Essex, Hertfordshire and Norfolk County Councils, said: “It is vital that Central Government realises just how damaging to people the consequences of this settlement would be.

“This proposed settlement has major implications for some of our most vulnerable people.

“The grim reality is that this poor settlement, combined with capping, will result in serious damage to councils' strategic services - undoing much of the progress achieved by the government and local authorities in partnership, over recent years.”

It adds: “Combined with the impact of resource equalisation on councils in the south, continued capping and no adjustment for supported borrowing for floor authorities, the forecast settlements will result in an unprecedented threat to the services and finances of our councils.”

But a spokeswoman for the Office of the Deputy Prime Minister insisted last night all local authorities had received a really good settlement.

“We have worked very closely with local authorities to identify cost pressures. There are still increases in funding for local government. It marks above inflation increases over all from 1997,” she said.

“The local authorities themselves must work, like central government, to meet the cost pressures and deliver public services effectively.

“There is currently no reason for excessive council tax increases. The Government is quite clear that ministers will use capping powers to protect council tax payers from excessive increases.

“Local authorities have a very good deal. In particular, Norfolk has a 7.1% increase in its funding which is pretty significant. Suffolk has 5%. Overall, it's above inflation. There is real and long-term investment in local government.”

But in the letter, councils in East Anglia said the budget gaps they faced could not be met by efficiency savings and they were now having “real trade offs” in what services they could and could not afford.

“The levels of cut backs we are planning leaves little or no capacity to invest in programmes that we know can deliver savings in the longer term,” the letter said.

“Between us, we have identified further “cashable” efficiency savings totalling a massive £73.2million for next year. But even this very considerable effort will go nowhere near to meeting the shortfall that this poor Government settlement leaves us with and this is scant reward indeed for our hard work and success to date.”

It added: “Please be in no doubt that this settlement, as proposed, represents a fundamental downshift in services now and for years to come.”

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