Councils hit by new funding cuts

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TOWN hall bosses were today assessing the impact of the latest central funding cuts by the Government.

The worst-off councils in England will have funding cut by an average of nearly three per cent, Eric Pickles revealed last night.

But the Communities Secretary told MPs the wealthiest councils face average funding cuts of 8.7 per cent for 2013-14.

He did not give a single national figure for funding cuts, but said other measures mean overall that councils’ “spending power” will be 1.7 per cent lower.

Budget chiefs in South Tyneside and other authorities across the country were today calculating exactly what that will mean, with previous predictions of cuts upwards of £12m needing to be made.

The authority had to make £20m worth of cuts in this financial year, after £35m savings in 2011-12.

In a Commons statement, Mr Pickles said: “This is a fair settlement, fair to the North and the South, fair to rural and urban.

“All councils have a moral duty to freeze council tax,” he told MPs, announcing that any attempt to raise it by more than two per cent would result in a local referendum.

From April, local authorities will retain half the amount of business rates raised within their boundaries, rather than transfer them to the Treasury.

This will contribute towards the “biggest shake-up of local finance in a generation”, Mr Pickles said, “based on self-determination”.

But Labour’s Hilary Benn insisted that local services in England’s poorest areas would be hit hardest by the cuts.

Mr Pickles was “living in a world of his own”, he said.

n Don’t miss tomorrow’s Gazette for more reaction.