Huntingdonshire District Council funding to fall by �480,000

FUNDING for Huntingdonshire from central Government is expected to fall by �480,000 next year – despite a statement from Communities Secretary Eric Pickles saying the district had been given a 2.8 per cent increase.

After crunching the figures – and calculating all the of the numbers involved in the complicated changes to next year’s funding – Huntingdonshire District Council will still have less money to spend.

Figures from Mr Pickles’ Department for Communities and Local Government (DCLG) released on Wednesday, December 19, said the “spending power” of the district would increase in 2013/14.

Not so, according to Pathfinder House. And the loss in Government funding is larger than HDC had estimated, albeit by only �30,000.

Just where Mr Pickles’ managed to find the positive picture for Huntingdonshire – and a few other councils in England – is still a bit unclear. HDC told The Hunts Post that it had analysed the Local Government Finance Settlement and it found its original estimate – that funding levels would fall by �450,000, or 4.8 per cent – was not far off the mark.

“Our calculation, following the announcement, shows we were quite close with our estimate and will lose an additional �30,000,” a HDC spokesman said.

Money for HDC comes in various forms, including a formula grant from Government, money from the New Homes Bonus (expected to be �2.9m in 2013/14) and, from next year, some of the money collected from business rates (about �4m) as well as Council Tax.

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But when it’s all added up HDC will end up with about �20m – plus a number of new risks associated with the Government ‘localising’ the Council Tax benefits system and business rates money.

“The Government has localised the Council Tax benefit scheme and will no longer fully fund it,” the HDC spokesman said. “Responsibility will transfer to local authorities and the Government will just provide a grant to cover 90 per cent of the historic cost. The council has had to modify the scheme and change some of the Council Tax rules in order to cover this cost.”

HDC will also be able to keep some of the business rates it collects, rather than sending it all to London. But this is not new money and will simply have been taken from another of the grants given to local authorities and, as many businesses are struggling, could see income fall.

The spokesman said HDC said it would only be allowed to keep a “small, Government-defined portion of the rates collected” and added: “If business rates subsequently rise, the council will keep part of it but if they decline, due to businesses closing, the council will lose.

However, things could get much worse in 2014/15 – provisional figures released by DCLG show funding is expected to fall by �1.3m, or 12.9 per cent.

Councillor Jonathan Gray, cabinet member for resources, added: “The proposals for the following year present very significant challenges that the council’s cabinet will be addressing in the next few weeks, so that a financially robust budget and medium term plan can be presented to the council for approval in February.”