Camden Council funding under increased pressure

Date:   23/6/10

Camden Council is continuing to face a grim financial outlook. The council is facing in year budget reductions and the emergency budget outlined a bleak future for public finances.

Major funding streams facing an uncertain future include Building Schools for the Future (BSF). The council is expecting £239m of funding over the next five years for this programme. However clarification is not expected until the Comprehensive Spending Review in the autumn.

The council has been informed of a number of further funding streams where money is at risk:

*    £3.6m of grant from Homes and Community Agency to support the Estate Regeneration Programme and improve resident’s homes in Camden.

*    Specific grants around play, extending free school meals and buddying pilots.

*    £100k for free swimming is to be cut, jeopardising free swimming just as Kentish Towns baths is due to open.

*    The council was due to receive £6.1m from Transport for London which remains at risk.

*    Target funding had been allocated to reduce CO2 in Camden council homes worth £4.605m. If the withdrawal of this funding is confirmed the works will not take place.

The council is due to receive £38m of specific grants in 2010/11. It is possible that government departments will seek to meet their own targets by reducing these areas.

Camden Council has also been informed that it has permanent in year grant reductions. £2.3 million will be cut from the Area Based Grant (ABG). This covers a large number of different non ringfenced funding streams. The council was previously free to use this funding to support the delivery of local priorities in the area and maintain services.

Other cuts have been made to the Local Area Agreement (LAA) Reward grant. Camden was due to receive £3.6 million over two years, but will only receive half this amount, £1.8 million. The council had planned to use the money to deal with meeting priorities of the Children and Young People’s Partnership Board.

Other cuts have been made to the Local Authority Business Growth Incentive scheme (LABGI). The previous government had announced £382,760 for 2010/11.The council anticipates that it will not receive any of this funding to help promote local business growth and economic development in Camden.

As outlined in the June cabinet meeting the council will be dealing with the challenge by reviewing budgets to see where efficiencies can be made in year and from one off resources.

The in year reductions set the tone for a bleak outlook for the national funding settlement. Camden Council is forecasting a projected budget gap of £60 to £80 million, for the period 2011-2014. The council’s initial plans for dealing with the deficit will be dealt with in the Medium Term Financial Strategy which will be discussed at the cabinet meeting on 21st July 2010.

Councillor Theo Blackwell, Cabinet Member for Resources, Camden Council said:

"As details of the national government cuts slowly become clearer, we are facing very difficult decisions in the coming months. The unprecedented in-year cut to council budgets means that money that was meant for funding more primary school places, community projects on estates and free swimming are jeopardised.

 

“Camden Council has always taken a long term approach to budget setting and these increased in-year reductions from government do not help when trying to deal with budget reductions in a planned and managed way.”

 

"We will have to wait until the Comprehensive Spending Review later this year to see the full picture, especially with regard to schools modernisation funds.  Camden is ready to fight its corner putting the best case to government to protect budgets and secure resources for the future."

Notes to editors

1. The UK public sector is facing its most serious funding challenge for many years. Camden Council is forecasting a projected budget gap of £60 to £80 million for the period 2011-2014.

2. The Chancellor recently (24 May 2010) announced reductions in public sector spending of £6.243 billion pounds. £1.165 billion of the total savings will be found from grants to local government.

3. This week research by London Council's revealed that London's local and regional government is set to loose at least £355 million this year. The impact could be greater as the research doesn't include announcements that may be made in the emergency budget (22 June 2010).

4. The council proposes to tackle the deficit issue in a two phased approach. Phase one involves identifying efficiencies that can be found in year and using one off resources to deal with reducing the initial gap for the current year. Initial plans for dealing with the longer term shortfall, will be detailed in the July Medium Term Financial Strategy report.

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Ref Code:   PR 1191
Contact:
     pressoffice@camden.gov.uk

Page last updated Sep 2, 2010 8:29 AM