2016/17 Local Government Finance Settlement Nicola Morton, Head of - - PowerPoint PPT Presentation

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 14th October 2016

Core Spending Power – all councils

0.000 5,000.000 10,000.000 15,000.000 20,000.000 25,000.000 30,000.000 35,000.000 40,000.000 45,000.000 50,000.000 2015-16 (adjusted) 2016-17 2017-18 2018-19 2019-20

£m

Final Settlement - February 2016

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 Delivery Grant 60.5 30

• 90.5

Additional grants (negative RSG end for 2017-18 and 2018-19)

• 2.3

22.8

• 25.1

Total extra cash 210.5 182.3 22.9 415.6 Additional £5 council tax Districts 14.3 23.8 32.1 39.2 109.4 Total extra core spending power 224.8 206.1 55 39.2 525

Additional resources in final settlement £m

20 40 60 80 100 120 140 160 2019/20 2018/19 2017/18 Additional £5 flexibility for Districts 2016/17 2018/19 Additional SFA to end negative RSG 2017/18 2017/18 Rural Services Grant 2016/17 2017/18 Transitional Grant 2016/17

Rest of England South East

• 4%
• 3%
• 2%
• 1%

0% 1% 2% 3% 4%

London (excl GLA) East of England South East South West North East North West East Midlands West Midlands Yorkshire and Humberside 2016-17 2017-18 2018-19 2019-20

Change in Core Spending Power over SR period by region

Core Spending Power per dwelling

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 London (excl GLA) North East West Midlands North West South East East of England South West East Midlands Yorkshire and Humberside £ 2016-17 2017-18 2017-18 2018-19

2019/20 - Negative Revenue Support Grant

Year Shire Counties London Boroughs Shire Unitaries Shire Districts Metropolitan Districts Fire Total 2019/20 11 3 8 146 168 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”.