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Government Settlement Figures for 2016/17

Craven District Council has now received information relating to its Provisional Funding settlement from the Government for the financial year 2016/17.

The council is carrying out a detailed analysis of the figures to assess their impact on the authority.

The Government has introduced a new measure of analysis called Core Spending Power; this now includes not only an allowance for Revenue Support Grant (RSG) and Business Rates (NDR) but also New Homes Bonus (NHB), Rural Services Delivery Grant and a projection of council tax revenue (based on national averages).

Our initial analysis shows that RSG funding has been reduced by 36% for 2016/17 with further reductions set to follow in 2017/18. The RSG will reduce to nil by 2019/20.

Whilst the inclusion of NHB and projections for council tax mitigate the impact of the RSG cut, it may force the council to review its use of NHB for investment in projects in the area.

The Government has recognised that providing services in a sparsely populated rural area costs more than in an urban area and has thus made an additional £4.5m available to qualifying authorities, which has resulted in an additional £15,000 funding for the council.

Whilst this, in itself, is encouraging news it pales into insignificance compared with the other additional costs faced by Craven District Council.

The council's long term financial strategy, which was agreed by councillors in September 2015, was based on a scenario of less severe reductions in RSG but also reductions in NHB and included savings of at least £266k in 2016/17, continuing to rise year on year.

The rules on council tax referenda were announced at the same time. The limit has been set at 2% for the district council; it does not currently apply to parishes.

Councillor Richard Foster, Leader of Craven District Council, said: "Our central government funding has been cut, which was not unexpected due to the discussions taking place recently on business rate reform and devolution.

"The council is faced with some difficult choices to present a balanced budget in February to the policy committee."