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Leaders of Local Authorities in England - page 3 / 7

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But since councils (including fire and rescue authorities) also raise revenue from other sources, the actual reduction in overall council spending will be much lower. There is a clear expectation that councils will use this new autonomy to protect key frontline services.

Local finance reform which protects the vulnerable

To help you do this, we are:

  • funding the council tax freeze: if you choose to freeze council tax in 2011-12, we will fund the equivalent of a 2.5% increase in council tax that year for the Spending Review period;

  • providing £1 billion of additional funding through the NHS budget to break down the barriers between health and social care, and rolling over £2.4 billion of adult social care grants - including an additional £1 billion by 2014-15 - into formula grant;

  • investing £4.5 billion in affordable housing over the next four years. As part of this, we intend to provide £200 million over four years to the Mortgage Rescue Scheme and £100 million for Empty Homes. We will also provide an extra £2 billion for the Decent Homes programme;

  • protecting investment in Homelessness Grant, which will remain at current levels;

  • protecting the Disabled Facilities Grant, while removing the ring fence to ensure councils can make their own choices about making the most of this money;

  • guaranteeing a £200 million capitalisation fund in 2011-12 to support those of you that wish to deliver efficiency savings early through internal restructuring; and

  • committing £6.5 billion to Supporting People over the next four years, and giving councils more flexibility to deploy it in line with local needs.

As part of our broader reforms to the welfare system, together we will secure savings in Council Tax Benefit spending and provide a localised approach to the benefit from 2013- 14. This will let councils gain from reductions in the cost of Council Tax Benefit in the future, with more detail set out later in the year. The Government wants Welfare Reform to help people who can work get back into work. It is not the Government's intention to interfere with pensioners' entitlements, rather to give councils greater freedom and flexibility.

Local innovation

But at the same time, the onus is very much on councils themselves to make the most of this unprecedented freedom and flexibility to focus all efforts and resources on protecting hardworking families, vulnerable people, and frontline services. That must mean:

  • fundamentally re-examining every aspect of the way that councils work;

  • eliminating all traces of waste by becoming more transparent and improving procurement practice;

  • maximising efficiency and productivity, drawing on the lessons of the LGA-led productivity programme;

  • sharing departments, officers and back office services between different local authorities; and

  • bringing excessive senior pay under control.

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