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Ref:  03/08       8 January 2008

Cheshire Council Taxpayers Lose Millions In Central Funding Allocation - Budget Consultation Told

Cheshire’s council taxpayers have missed out on almost £5m in three years - due to the county’s lower than average central funding grants from Whitehall.
 
The figure is revealed in a report on the county county’s financial position to 300 key stakeholders involved in the authority’s annual budget consultation.
 
It reflects the “very challenging scenario" of reduced national funding to meet increased service demands currently facing local authorities across the country.
 
“The recent Grant Settlement was described by the Local Government Association as “the worst for a decade” says County Council leader Paul Findlow.
 
In Cheshire the position is particularly difficult. The 2.2% funding increase for 2008-09 is much lower than the 5.7% shire county average, with some shires receiving up to 11%.
 
“Since the introduction of the current grant distribution system in 2006-07, Cheshire has received a cumulative increase of 7.9% compared with the average shire increase of 13.3%.” says County Councillor Findlow. 
 
 “Had Cheshire received the average national increase it would now have an extra £4.8m of funding available“.

The leader  emphasises that County Council will also continue to lobby actively for a fairer national system of local government funding which does not unfairly penalise more rural county areas such as Cheshire.
 
Cheshire’s 2.2% increase is only an additional £2.1m of funding and equates to a “real terms” shortfall as cost pressures, increasing public demand for local services and new legislative requirements combine to produce financial pressures significantly above this level. 
 
Inflationary market pressures for social care (3.9%), waste (4%), highways maintenance (3.9%) and energy (10%) are all significantly above the HM Treasury funding assumption of 1.8% for inflation pressures. 
 
 The increase in landfill tax alone is estimated to be £1.5m for 2008-09.  Demographic factors are also increasing costs. An aging population and an increasing number of vulnerable adults with complex needs will cost an estimated £4.4m extra next year. 
 
New responsibilities such as those created by the Care Matters White Paper are also demanding additional resources.  The estimated costs of meeting the requirements of the White Paper are estimated as £0.8m in 2008-09.
 
“These factors combine to create a financial scenario which provides very little room for manoeuvre and presents us with some very difficult choices" warns Finance Executive Member Gretta Cousins.
 
 But whilst, all services have been required to look at their areas of responsibility, it was vital that the authority continued to protect and enhance service provision in Corporate Plan priority areas.    
 
“The Administration is seeking to minimise the areas of service reductions as far as possible, aspiring to set a stable, sustainable budget, promises the Executive Member.
 
Cheshire County Council’s medium-term financial planning arrangements had to a large extent anticipated a difficult financial scenario and last year the Council initiated its Transforming Cheshire programme to deliver substantial efficiencies and service improvements. 
 
 The budget consultation will take place between Jan 11th -30th and results will be taken into consideration in the preparation of final proposals to go before budget council on February 6.
 
Ends 
 
IC/CJ

Note To Editors:  For more information please contact Councillor Findlow on 01625 828004 and Councillor Cousins on 01928 733823.