Robin has warmly welcomed the announcement in Parliament of improvements to the local Government finance settlement that address a number of Worcestershire’s key concerns. The MP arranged last week for local MPs from across Worcestershire and Councillor Simon Geraghty, the new Leader of the County Council to meet with the Secretary of State for Communities and Local Government to raise some of their key concerns about the original local Government settlement announced at the end of last year.
These focused on the tougher than expected reductions in the so called RSG – the direct grant from Government to Councils in the first two years, the greater needs of rural Counties when it comes to the elderly and concerns that the formula had been unfair to rural areas. Yesterday in the House of Commons the Communities Secretary, Greg Clark announced that he had listened to such concerns and specifically mentioned Worcestershire as one of the councils to which he had paid attention.
His statement covered four key changes each of which should be positive for the County:
1 – Additional funding to ease the pace of reductions in RSG over the first two years with a £150 million transitional grant from which Worcestershire will receive £2.52m in each of the first two years of the settlement
2- A review of the local government funding formula with the specific aim of supporting pressures such as the growth in the elderly population, a factor which affects Worcestershire particularly sharply
3- An increase in the Rural Services Delivery Grant which targets extra support to rural areas from £15.5 million this year to £80.5 million in 2016-17. This means that, taking into account their share of transitional funding, the total amount of increased funding for rural areas is £93.2 million
4- No Council will have to pay a negative RSG for 2017-18 or 2018-19 as the changes to the formula had originally suggested that some would. This protects a number of Worcestershire districts from effectively having to pay a tax to central government instead of receiving a grant
The changes make less difference to Worcester but the district council will also benefit by an additional £26,000 as a result of the transitional funding and will no longer risk having to pay negative grant in 2018-19.
The Secretary of State specifically mentioned some of the pressure from Worcestershire in his statement when he said
“Local finance through council tax and business rates, rather than central Government grant, has been a big objective of councils for decades. However, many authorities and many hon. Members, especially those from counties such as Dorset, Leicestershire, Hampshire, Worcestershire, Lancashire, and several London boroughs including Kingston and Havering, have argued for transitional help during the first two years when central Government grant declines most sharply.”
He went on to say “Much in the provisional settlement was welcomed, but specific points were raised about the sharpness of changes in Government grant in the early years of this Parliament and there were concerns about the cost of service delivery in rural areas. Another very important point was made: many colleagues and councils felt that too much time has passed since the last substantial revision of the formula that assesses a council’s needs and the cost it can expect in meeting those needs. These responses to the consultation seemed to me to be reasonable and ought to be accommodated if at all possible.”
Commenting on these announcements Robin said:
“This remains a tough settlement for local government and I am not going to pretend that Worcestershire faces no challenge, but I am delighted that Greg Clark really engaged with the arguments from Worcestershire and other Counties and every one of the points that local MPs and councillors raised with him has been heard and at least partly addressed. It was certainly worth rushing to get a meeting and making our case following the original settlement. I am grateful to all my County colleagues who supported this process and joined me in making the case for a better deal for Worcestershire.”
“The additional £5 million of transitional funding in the first two years will make Worcestershire’s task slightly less daunting but the changes to the formula and the improvement in the rural services grant should also help substantially as time passes. I have always campaigned for fair funding in education and it is good to see it being delivered elsewhere too. We made the case to the Secretary of State that the reductions in the direct grant from Government should also be mirrored by more rapid devolution of business rates and I am hopeful that the strongest possible case can be made for a County deal that delivers this. I particularly want to congratulate Simon Geraghty for making such a persuasive case on behalf of our County and I look forward to working with him to support Worcestershire in the years ahead.”
Notes to editors:
The full statement from Greg Clark in the House of Commons can be found here: