Local Government

Revenue grants to councils will reduce by 28% over the spending review period. However, when taking into account funding from other Government departments and council tax, the overall reduction in revenue grants will be 26%. Central Government anticipates local authorities will see forecast reductions of around 30% in overall capital expenditure, including reductions of around 45% in capital funding from Government departments, and OBR forecast of 17% reduction in self-financed capital expenditure.

Sir Philip Green’s report has identified that currently budgets are only centrally reviewed at the highest level, and rarely against any KPIs. Departments are not incentivised to spend less than cash budgeted.

In addition to challenging reductions in budget the spending review attempts to counter-balance this by affording greater freedom and flexibility and greater budgetary controls. Potential routes to saving include...

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