Dorset County Council has welcomed the announcement of the local government finance settlement by the Secretary of State for Communities and Local Government, Greg Clark MP, yesterday (8 February).
The deal for distributing government grants to local authorities will see the county council receive £4.1m of transitional support from the Government in 2016/17.
The news follows the Government’s consultation with councils on the provisional settlement, which was published in December. This changed the way funding is shared between cities and counties and would have left Dorset needing to save an extra £7.4m on top of the £13m already planned in the coming year.
As part of the move towards councils retaining 100 per cent of business rates in their area, the Government plans to phase out the revenue support grant (RSG) it gives to councils over four years.
Dorset is one of only two county councils that will lose all of its RSG in two years’ time and is the financially worst-affected in the country.
The transitional support and extra grant for rural authorities announced by Mr Clark in the House of Commons yesterday will see the £7.4m of extra cuts in 2016/17 reduced to £3.3m.
The council will receive a further £3.5m of support in 2017/18 and £2.1m in 2018/19, which means it will not receive ‘negative’ grants in the next two years as feared, which would have seen it having to pay money back from its business rates.
The Government then plans to review what the needs of councils across the country should be as they move away from grants to raising money from local business rates and council tax.
Cllr Robert Gould, the Leader of the council, said: “I welcome that the Government has listened to the need for transitional funding for the worst-affected councils.
“Since December, we have been lobbying the Government over the changes and lack of consultation about them. I am also grateful to the support of our local MPs in helping press our case in Parliament.
“However, even with this additional support our financial position remains very challenging. We still need to make the planned savings and more to set a balanced budget, which will impact on the way we deliver services.
“We will be taking every opportunity to feed into consultation on keeping 100 per cent of business rates in Dorset and reviewing of the funding formula to avoid Dorset getting a worse deal in future years.”