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Local Government funding announcement


Local Government Secretary Eric Pickles has announced funding levels for local authorities for the next two years. Although large cuts are being applied to local government, no authority will be given a reduction of more than 8.9% in spending power (taking into account Council Tax and money transferred from the NHS). Three North East authorities – Hartlepool, Middlesbrough and South Tyneside – require a ‘Transition Grant’ to prevent them falling below this minimum funding level in 2011/2.

When central government grants alone are considered, year-on-year cuts range from 17.3% for Hartlepool to 8.4% for Darlington in 2011/2; and from a further 9.1% for Stockton to 7.5% for Middlesbrough in 2012/3. Full details are available here, while NECC members can see the impact on the North East by logging into the NECC website and clicking on ‘Campaign Updates’.

NECC has concerns that these funding reductions could have the biggest impact on services most important to businesses, such as economic development or planning. Furthermore, they could encourage procurement decisions which create short-term savings, but have unintended economic consequences in the longer term. NECC will be meeting with all local authorities to discuss budget plans over the coming weeks and will be outlining businesses’ priorities for where they should focus resources.

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