For local government, the deficit we have inherited means an unavoidably challenging settlement
Chancellor George Osbourne
However, the Chancellor did offer some good news to councils in his Spending Review by pledging to fund the freeze in council tax announced in June's Budget for 2011/12 (see letsrecycle.com story). And, he promised a “massive” devolution of financial control to councils by ending the ring-fencing of all council revenue grants from 2011-12.
He also said the government would maintain what it called the “important flexibility” on prudential borrowing – something which is seen by many local authorities as an important funding alternative to PFI (see letsrecycle.com story).
The reduction in the Local Government Settlement is part of wider plans to reduce the country's £109 billion structural deficit – the largest in Europe.
It means that, on average, central government funding to councils decreases by around 26% over the next four years.
This will force councils to make further savings in the delivery of their waste and recycling services, through measures such as joint working, closing household waste and recycling centres and reorganising collection rounds to make them more efficient.
“Challenging”
Laying out his plans in parliament, the Chancellor said: “For local government, the deficit we have inherited means an unavoidably challenging settlement. There will be overall savings in funding to councils of 7.1% a year for four years.
“But to help councils, we propose a massive devolution of financial control. Today I can confirm that ring-fencing of all local government revenue grants will end from April next year.”
Today's Spending Review also saw significant cuts announced for the Department for Environment, Food and Rural Affairs, which is responsible for waste and recycling (see letsrecycle.com story).
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