Finance bulletin: 18 June 2012
Dear colleagues,
In my first year as Chairman there have been very significant challenges for councils and I have been working to ensure that the LGA has delivered value for its members in tackling these. We have helped councils to secure priority creditor status with Icelandic banks, worked with government to find a way forward for the Local Government Pension Scheme and have laid the groundwork for cheaper borrowing for councils, either through the Public Works Loan Board or a sector-owned borrowing agency; we have secured a foot in the door for councils to deliver Universal Credit and made sure that councils will be the recipients of £450 million to support work with troubled families. I am also pleased to say that our continued work has secured councils a 40 per cent reduction in audit fees from the Audit Commission for the next 5+ years. Our programme of work for the year is designed to continue work on these fronts, as well as tackle a raft of new challenges emerging for councils – especially the prospect of continuing budget cuts after 2015.
A priority for me and for the organisation is to improve on the government's proposals for the devolution of council tax benefit. We have been working with peers ahead of the Lords stage to push for councils to be given full control over the rules for council tax and its various discounts and exemptions. This ties in with another major piece of work we have undertaken which looks at creating a more sustainable funding settlement for councils over the rest of this decade. We will be launching this work at our annual conference in Birmingham between the 26-28 June and I look forward to seeing you there.
Cllr Sir Merrick Cockell
Chairman, Local Government Association
Stories
Local Government Finance Bill
Ahead of the start of the Lords stage of the Local Government Finance Bill this month, the LGA held briefing sessions with Conservative, Labour, Liberal Democrat and cross-bench peers. The sessions engaged a great deal of interest from peers across all parties in tabling amendments proposed by the LGA and registering our key messages in the debates, which we are now following up. We also secured media coverage reflecting councils' concerns with the £500 million cut to council tax benefit funding.
Read our press release, 12 June 2012
School building fund
The LGA's lobbying helped to secure £2 billion in capital funding from the Department for Education to help schools in urgent need of repair. Although this funding will go some way to addressing the problems facing some of our most dilapidated schools, we will continue to press the case for the hundreds of run-down schools that are still in limbo.
Read our press release, 24 May 2012
Welfare reform
The LGA is trying to establish councils' readiness for the implementation of the Welfare Reform Act and the impact of local housing allowance (LHA) reforms. While we are very grateful to those councils that have already responded to previous requests, we would welcome many more responses so we can get a picture that is representative of the whole country.
We not only need this data to help in our discussions with Government on implementation and new burdens, but also to get some indication of the possible impacts of the Welfare Reform Act once its major elements start to be enacted next year.
To respond, please complete the questionnaire on the LGA Welfare Reform Knowledge Hub group and send it to John Wright: john.wright@local.gov.uk.
Welfare Reform Knowledge Hub group
In order to ease the burden on already hard pressed council departments and to provide some degree of commonality in the advice issued to benefit claimants by councils, the LGA has developed some text which councils can use to inform those who might be affected by the benefit cap, the introduction of Universal Credit, or other welfare changes. The text can be adapted to suit local needs and issued in a locally produced, council branded document.
Icelandic banks
Last month, the administrators of Landsbanki made a payment of £51 million to local authority creditors, bringing the value of total recoveries from all of the failed banks to over £630 million. This means that almost two-thirds of the amount deposited in the four banks is now back with authorities, with further distributions expected.
Read our press release, 29 May 2012
Local Government Pension Fund
On 31 May 2012, the LGA and the trade unions announced the outcomes of their negotiations on new Local Government Pension Scheme proposals (for England and Wales) to take effect from 1 April 2014. Unions will now consult their members over these proposals and the LGA will consult employers. The Government has confirmed that a favourable outcome of these consultations will enable them to move directly to a statutory consultation later in the autumn to implement these proposals.
Read our press release, 31 May 2012
Public Health Funding
The Advisory Committee on Resource Allocation (ACRA) has published its initial recommendations to the Government on the distribution formula for the public health grant to local government.
View the initial recommendations on the Department of Health website
The basis of the formula is the standardised mortality ratio for those aged under 75, with adjustments for age, fixed costs, non-resident populations and Office of National Statistics population estimates. The new Health Premium Incentive will be linked to the public health outcomes framework and some local indicators. The recommendations do not include the final quantum of resource available, the pace of change and the specific allocations to local authorities.
Troubled families funding
The Government has confirmed that there has been 100 per cent take-up of the Troubled Families Payment-by-Results scheme. The funding will be available for 5 out of 6 families in each upper tier local authority. In March the Government published the outcomes framework for the scheme, which is as follows:
more than 85 per cent attendance in schools and fewer than three exclusions from school
a 60 per cent reduction in anti-social behaviour across the whole family
and a 33 per cent reduction in youth offending
Payment of £3,900 (in 2012/13)
Plus:
- progress towards work such as referral and attachment to the Work Programme or the European Social Fund provision for troubled families
Payment of £100 (in 2012/13)
Or:
- one adult in the family moving off benefits and into continuous work
Payment of £4,000
The remaining 60 per cent of the funding must be put forward by councils and their partner agencies.
Department for Communities and Local Government press release, 11 June 2012
Publications
Enterprising councils
The LGA and Local Partnerships published an updated version of ‘Enterprising Councils: Getting the most from trading and charging' last month. The 2012 edition provides information on how councils can use the General Power of Competence within the Localism Act 2011 to bolster their trading and charging activities.
Enterprising councils: Getting the most from trading and charging
Events
The Welfare Reform Act 2012: Implications and challenges for local authorities
20 July 2012 | London
The Welfare Reform Act brings radical change to the welfare environment. Delegates at this conference will hear Lord Freud, Minister for Welfare Reform, Lord Victor Adebowale, Chief Executive of Turning Point, and other key speakers discuss the changes to the delivery of welfare and be among the first to hear which councils have been selected to pilot the delivery of Universal Credit.
Sharing ideas
Cambridge and Counties bank
The Cambridge Local Government Pension Fund and Trinity Hall, a college of the University of Cambridge, have joined forces to establish the Cambridge and Counties Bank. The bank will target small to medium sized enterprises, primarily in Cambridgeshire, Northamptonshire and Leicestershire areas, providing loans secured against commercial property. In addition, it will also offer secured pension scheme lending, and has plans to launch professional firm financing, as well as other competitive savings accounts into both the retail and non-retail sectors.
LGA Equality Frameworks
Understanding equality is essential to the effective design and delivery of local services. It is at the heart of effective, efficient and transparent decisions, including how to implement spending cuts, devolve power to communities and move to new ways of working.
On Monday 24 September, the LGA is holding an event ‘Doing the Duty – using the Equality Framework to make evidence-based decisions', where delegates will hear from all of the authorities at "excellent" level of the of the Equality Framework for Local Government (EFLG) to discuss how they are continuing the use the EFLG to meet the challenges of making difficult decisions around budget setting and allocating and prioritising resources.
30 January 2013
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