The Comprehensive Spending Review 2007
On a rolling basis the Treasury carries out a
spending review, the outcomes of which are Government departmental
plans for future service commitments and the allocation of national
tax revenues. Typically these are undertaken every two years,
although this schedule slipped by a year after Spending Review 2004
due to the fact that Comprehensive Spending Review 2007 (CSR07)
included a much more thorough analysis of public sector spending
than usual.
CSR07 was announced in October 2007 alongside
the pre-budget report for 2008. The headline growth for the
Local Government grant, for both revenue and capital commitments,
was a 1.1% average growth in real terms (over and above 2.9%
anticipated inflation) for each of the three financial years 2008 –
2011, which, given the pressure on Councils to improve services and
increase community engagement, represents the tightest settlement
for many years. This position is expected to continue for some
years to come.
As well as the increase in Formula Grant for
Local Government services, additional growth was provided for
within
- CSR07 for additional housing and planning
delivery grant (£500m)
- neighbourhood and local renewal programmes
(£2bn)
- other elements to fund the Department of
Communities and Local Government’s commitment to the development of
sustainable communities.
District Councils will also benefit from a
further £200m contained within the CSR07 allocations for the
Department for Transport, which will be distributed as specific
grant to meet the costs arising from extending the concessionary
bus fares scheme onto a national basis.
The CSR07 announced that from 2008 onwards,
the presumption for all revenue funding is that it will be
delivered through Revenue Support Grant to meet the principles set
out in the White Paper ‘Strong and Prosperous Communities’ to give
increased flexibility and allow local authorities to meet local
priorities more efficiently.
Where this is not possible for distributional
reasons, funding may be distributed through an Area Based Grant
(previously known as a Local Area Agreement grant). Only in
exceptional circumstances would any grants be ring-fenced for a
specific purpose.
The other notable change to the local
authority funding mechanisms that was introduced within the CSR07
was the intention to grant additional powers to Councils to raise
supplementary business rates up to a limit of 2 pence in the
pound. However, the proposals restrict this power to county
or unitary authorities, which within Kent means Kent County Council
and Medway Council, therefore the implications for Thanet are not
known at this point in time.