Osborne pledges ‘greater financial autonomy'

Author: Local Government Chronicle - Jun 10, 2010

Council chiefs’ hopes that ministers would consider Total Place-style “area budgets” were boosted when the chancellor pledged to hand councils greater financial autonomy and to consider local government’s needs holistically.

Unveiling his framework for the autumn spending review, which runs up to 2014-15, George Osborne told MPs he would “challenge local government to consider fundamental changes to the way they provide vital services”.

The accompanying document, The spending review framework, appeared to offer hope for localism. It said the government pledged to promote the “radical devolution of power and greater financial autonomy to local government”.

“The government will ensure that the spending review process considers the needs of local government holistically, and takes account of the opportunities for frontline bodies to work together across traditional boundaries,” it added.

Local Government Association programme director Paul Raynes welcomed the government’s restated commitment to devolution and said the document chimed with the LGA’s call for area budgets (27 May, LGCplus.com/5015051.article).

Under the LGA’s proposals, ring-fencing would be lifted from funding streams, such as transport, regeneration and housing, and councils would be able to make decisions on spending in their areas.

Today, communities secretary Eric Pickles is expected to reveal which council grants will be hit by the £1.165bn worth of savings as part of the government’s £6.2bn in-year cuts programme.

Mr Pickles is also expected to specify which grants will lose ring-fenced status to give councils more flexibility over spending.

Grants from the Department for Communities & Local Government will bear the brunt - cut by £362m. Other council losses include: £309m from the Department for Transport; Department for Education (£311m); Department for Environment, Food & Rural Affairs (£8m); and £175m coming from Treasury grants administered by DCLG.

Mr Pickles’ announcement will end an agonising wait for council chiefs, who have become increasingly frustrated by ministers’ refusal to reveal the details, despite having originally indicated they would be outlined on 2 June.

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