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Provisional Local Government Finance Settlement 2015/16

  • By London Councils

Provisional Local Government Finance Settlement 2015/16 - Chief Officer Briefing

The provisional 2015-16 Local Government Finance Settlement was announced yesterday (18 December 2014) by Kris Hopkins MP, the Parliamentary Under Secretary of State for Communities and Local Government. Full details on the settlement can be found on the DCLG website.

The Settlement outlines provisional core funding allocations (Settlement Funding Assessment – SFA ) for local authorities and sets out the impact on local authority “Revenue Spending Power”, as defined by Government for 2015-16.  

Key points

Funding
– The reduction in Revenue Spending Power  in England (excl. the GLA) is £0.9 billion (1.8%) in 2015-16.
– For London Boroughs, it is £280 million (3.4%) in 2015-16.
– There is an overall cap in the reduction of Revenue Spending Power of 6.4% in 2015-16.
– Overall, Settlement Funding Assessment (SFA – core funding) for England will fall by £3.4 billion from £24.1 billion in 2014-15 to £20.8 billion in 2015-16 – a fall of 13.9%.
– For London local government, SFA will fall by £669 million (15.1%) from £4.4 billion to £3.8 billion.
– In 2015-16, London boroughs will receive this funding through Revenue Support Grant (£1.7 billion; 46%) and baseline funding (£2.0 billion; 54%).
– Between 2010-11 and 2015-16, London boroughs’ core funding will have fallen in real terms by 45% on a like-for-like basis compared with 44% across local government in England.
– The Council Tax Freeze Grant will be available to local authorities at the equivalent of a 1 per cent freeze.
– The council tax referendum threshold will remain at 2%.

Business Rates Retention
– The principal scheme architecture remains broadly the same.
– There are no changes to whether an authority is a top up or tariff authority.
– The increase in tariffs and top-ups, business rates and funding baselines will again be capped at 2% as announced in the 2014 Autumn Statement.
– London boroughs will receive SFA adjustment grants (c. £29 million) to compensate for this.
– The safety net threshold remains at 7.5% of an authority’s baseline funding level.
– Individual levy rates, including the 50p cap on the levy rate, remain the same.

You can download the full briefing on the right and further detail on individual authorities in London can be found in the accompanying annexes (A to D).