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Local Government: Finance

House of Lords written question – answered on 24th January 2011.

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Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

To ask Her Majesty's Government, in light of the Local Government Finance Settlement announced on 13 December, what is the size of the £85 million of transitional grant to reduce the front loading of grant reductions as a percentage of total local authority expenditure.

Photo of Baroness Hanham Baroness Hanham The Parliamentary Under-Secretary of State for Communities and Local Government

The transitional grant ensures that no authority experiences a "revenue spending power" reduction in either 2011-12 or 2012-13 of more than 8.9 per cent. It protects those authorities who are very dependent on central government grants such as the working neighbourhood fund, as well as the capacity of authorities to raise income locally. It was not introduced to change the overall annual profile of the spending plans up to 2014-15, which have been set in order to ensure that the Government tackle the record fiscal deficit. £85 million is to be paid in 2011-12 and represents 0.07 per cent of the £121 billion total net current expenditure budgeted for 2010-11 by those local authorities which receive formula grant. This expenditure is as reported by local authorities on the revenue account (RA) forms submitted annually to the Department for Communities and Local Government. Local authority budgeted expenditure for 2011-12 is not yet available.

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