Government slashes Suffolk County Council’s settlement grant by 2% while Essex County Council must save £49m

Local authorities across the region are getting a substantial cut in Whitehall grants next year as the Government imposes an average 1.8% funding cut across the country.

However most authorities in Suffolk will see their funding fall by a larger proportion as the coalition tries to make them more reliant on locally-raised money rather than government grants.

Suffolk County Council’s government grants are being calculated on the assumption that the authority will cut its budget by 2%.

This is broadly in line with expectations, but finance officers at Endeavour House are busy working out the exact implications of the news.

Conservative council leader Mark Bee said: “We’ve only just heard the figure. It is broadly in line with what we were expecting and that we had been basing our plans for next year on.

“However over the next few weeks our finance staff will be looking closely at the details and seeing how it will affect our budget plans for next year.”

Ipswich Council’s Labour leader David Ellesmere was unimpressed by the news: “I wouldn’t say this is a nasty shock. It’s nasty, but it’s not a shock because it’s what they’ve been talking about.”

This should allow the borough to avoid cutting front-line services.

He claimed the government figures were “spin” because the true cut in support from Whitehall was much larger than the 3.6% “spending power” cut announced in official tables.

Mr Ellesmere said: “The amount we are getting from government, including commercial rates and the direct grant, is coming down from £8.2 million to £6.9 million – about 16%.

“And the majority of that is the commercial rates, the amount of direct government grant is falling so fast that in a year or two it will be irrelevant.”

In the west of the county St Edmundsbury and Forest Heath councils are looking at direct grant cuts of nearly 50% each over the next two years.

In a joint statement from their leaders John Griffiths and James Waters, the authorities said: “We have been planning for a very serious reduction and it is that level of reduction that has been confirmed today.

“We recognise – and indeed anticipated – that central Government funding will inevitably be squeezed each year and it is precisely because of this, that our two councils are sharing services, a move that is delivering annual savings in excess of £3.5m a year.”

Essex County Council is preparing for cuts of £49million next year.

Council leader David Finch said: “As a forward thinking authority we have worked hard over many years to have new and pioneering approaches in place to ensure we maintain a financially robust Council that builds a better Essex for everyone

“This is going to get tougher, but we are working closely with our partners across the county in order to deal with these funding reductions.”

The settlement was announced in the House of Commons by local government minister Kris Hopkins who said: “Every bit of the public sector needs to do their bit to pay off deficit left by the last administration, including local government which accounts for a quarter of all public spending.

“The local government settlement is fair to all parts of the country – north and south, rural and urban, city and shire – therefore every council should be able to deliver sensible savings while protecting frontline services for local taxpayers.”