Woolas confirms grant increases for local authorities

Date published: 31/01/2006

The first Two Year Settlement, providing local government in England with stable and truly predictable funding, was confirmed today by Local Government Minister Phil Woolas.

Local Authorities in England will receive more than £62 billion in Government grant in 2006/07 and £65bn in 2007/08 - an increase of 4.5% and 5.0% in those years.

The two settlements mark ten successive years in which Government has provided local government with grant increases above inflation. This amounts to a real terms increase in Government grant to local authorities of 39% since 1997.

The final report, published today, comes after a consultation period with local government following the 5 December announcement of the Government's proposals on Formula Grant for 2006/07 and 2007/08.

Phil Woolas said:

"This is another good settlement for local authorities in England and marks ten successive years in which we have provided local government with an above inflation grant increase.

"And with the announcement of a Two Year settlement, Government is also  providing local authorities in England with stable and predictable funding.

"Given this substantial investment in local government, we expect all authorities to budget prudently and not place excessive demands on their  council taxpayers.

"No authority should consider that it might be exempt from capping - if its increase is excessive, capping action will be taken."

Full details setting out all funding announced in the Local Government Finance Settlement is available on the ODPM website at www.local.odpm.gov.uk