SR2002/LG
15 July 2002
Investing in better local services
Local government services received a boost today as the Chancellor unveiled average increases in the Office of the Deputy Prime Minister's local government programme of 4.2 per cent a year in real terms over the next three years. This will support delivery of improved schools, better care for the elderly and help the fight against crime.
The package for local government includes:
- a substantial across the board increase in general revenue grant for local authorities with average increases of 3.9 per cent a year in real terms over the next three years;
- reward grants worth up to a total of £635 million over three years for authorities who achieve stretching targets agreed with central government through local Public Service Agreements;
- increased resources for the Neighbourhood Renewal Fund, which will channel £400 million in 2003-04, £450 million in 2004-05 and £525 million in 2005-06 to where it is most needed to improve public services and tackle the barriers to opportunity in our most deprived communities;
- a 10.7% annual average real increase in local authority investment in schools, transport and other key services through capital support and PFI over the three years to 2005-6;
- more resources to support better service delivery, including more than £500 million over three years to implement the electronic delivery of local services.
The Deputy Prime Minister, John Prescott, welcomed today's announcement, saying:
"This settlement means that local government will be able to continue to take forward the vision set out in our White Paper 'Strong Local Leadership - Quality Public Services'. We now have the resources over the next three years to drive forward this public service improvement agenda and meet local needs. This is good news for local authorities and the people served by them."
Notes for editors
1. The ODPM settlement is set out in press notice SR2002/ODPM.
2. Plans for Standard Spending Assessments in 2003-04 to 2005-06 are set out below. The Standard Spending Assessment system for distributing resources to local government is the subject of a separate review. The Government is currently consulting on a range of options for the new system. Some of these options, if implemented, would alter significantly upwards the figures referred to here as Standard Spending Assessment totals. This is because they would re-base the figures in line with what councils actually spend on particular service blocks. However, this apparent increase in the totals would not require or lead to any more grant being made available by the Government. Transfers of resources into or out of Standard Spending Assessments and grant could change the totals for 2003-04 or later years. This could alter the percentage increases between years.
| £ million | 2002-03 | 2003-04 | 2004-05 | 2005-06 |
| Standard Spending Assessments | ||||
| Education | 22,503 | 23,928 | 25,285 | 26,828 |
| Personal Social Services | 9,231 | 10,023 | 10,715 | 11,856 |
| Police | 3,577 | 3,995 | 4,195 | 4,395 |
| Fire | 1,521 | 1,583 | 1,653 | 1,703 |
| Highway Maintenance | 1,955 | 2,005 | 2,055 | 2,105 |
| Environmental, Protective and Cultural Services | 8,961 | 9,435 | 9,703 | 10,024 |
| Capital Financing1 | 2,224 | 2,648 | 2,838 | 3,323 |
| Total Standard Spending Assessments | 49,972 | 53,616 | 56,443 | 60,233 |
1 Capital Financing figures for 2002-03 include the PFI Special Grant
2 All Standard Spending Assessments are for local authorities' revenue spending
3. Grant support for spending is provided through the Office of the Deputy Prime Minister's local government programme as Net Aggregate External Finance (AEF). This programme also covers other activities including the Neighbourhood Renewal Fund, the Local Government On-Line initiative and funds to reward authorities who achieve targets within local PSAs. The capital budget figures set out below are to fund these initiatives - the vast majority of capital investment is provided to local government though other departmental programmes.
| £ million | 2002-03 | 2003-04 | 2004-05 | 2005-06 |
| Office of the Deputy Prime Minister: Local Government | ||||
| Resource Budget | 37,376 | 40,385 | 42,473 | 45,539 |
| Capital Budget | 274 | 324 | 324 | 349 |
| Total Departmental Expenditure Limit1 | 37,649 | 40,708 | 42,797 | 45,888 |
1 Full resource budgeting basis, net of depreciation.
2 Consistent with previous control basis.
4. The Local Government White Paper, Strong Local Leadership - Quality Public Services (CM5237, Department for Transport, Local Government and the Regions: London) was published in December 2001.
5. For further details please contact the Press Office for the Office of the Deputy Prime Minister on 020 7944 3042; Out of hours: 07659 116934 or visit the ODPM website.