Decision details

This report provides Cabinet with details of the provisional local government settlement

This report provided Cabinet with details of the provisional Local Government settlement announced by Government on 13 December 2010, with consultation undertaken by central government until 17 January 2011. The report set out the impact of the settlement on Medway: for formula grant, the figure for 2011/2012 was £86.097m which represented a cut of 11.9%. For 2012/2013 the figure was £78.286m which represented a further reduction of £7.811m or 8.3%.

It was noted that for schools the provisional increase for the Dedicated Schools Grant was 3%, which translated into a zero cash per pupil increase due to increased pupil numbers. The report also referred to other Department for Education grants, including the pupil premium, funding for academies, sixth form funding and the early intervention grant (including Sure Start).

The report stated that the capital settlement announcement reflected a reduction in core funding with the overall allocation for Medway reducing from £33.254m in 2010/2011 to £14.751m in 2011/2012.

Overall, the Council faced a funding gap of £23.5m for 2011/2012, and paragraph 6 of the report set out the initiatives the Council was undertaking to mitigate this.

The Cabinet accepted this as an urgent item to enable officers to commence formal consultation with staff on the financial implications of the Local Government Settlement, as set out in this report, as soon as possible.

Reasons:

These provisional levels of grant form a fundamental component of the 2011/2012 budget, and their announcement is a further stage in the process of preparing a balanced budget.