A cut in spending power for councils across Sussex represents "a bargain to local authorities", according to a Government minister.

Councils in England will see their spending power decrease on average by 1.7% next year, Local Government secretary Eric Pickles told MPs during a Commons announcement this afternoon (December 19).

  • Brighton and Hove will have a 2.8% cut.
  • East Sussex is down 1.8% and West Sussex is down 2%.
  • Hastings Borough is the biggest loser among second tier authorities losing 13.4% of its grant.

A "small number" of local authorities would require larger savings to be made but no council would face a loss of more than 8.8% of their total spending power, he declared.

However, an exact breakdown of funding to councils has not yet been released by the Department for Communities and Local Government.

Mr Pickles said: "The settlement leaves councils with considerable total spending power. So I can announce today that the overall reduction in spending power next year will be just 1.7%; 1.7% represents a bargain to local authorities.

"A small number of local authorities will require larger savings to be made but no council will face a loss of more than 8.8% of their total spending power, thanks to a new efficiency support grant.

"As the name implies, to qualify, councils will have to improve services to receive this grant. It is unfair on the rest of local government to expect them to subsidise other councils' failure to embrace modernity."

Cuts to services

Responding to the statement, shadow communities and local government secretary Hilary Benn said: "It is clear that he is living in a world of his own because he simply does not understand the impact that his decisions on funding are having on the services and local people who use and rely upon them."

Mr Pickles said this year's settlement would see council expenditure "fall in a controlled way", with English local government accounting for one pound of every four pounds spent on public services - £114 billion.

The settlement he said "begins the greatest shake up of local finance in a generation" and recognised the responsibility of local government to find "sensible savings and to make better use of its resources".

The new financial arrangement, he added, was based on self determination and financial independence, "a move from the begging bowl, to pride in locality" with power shifting from Whitehall to town and county halls.

Business rates

From April councils, he said, would retain nearly £11 billion of business rates instead of returning them to the Treasury.

The New Homes Bonus would remunerate councils for building more homes, with the bonus being worth nearly £650 million next year and more in 2014/15.

While under the reforms an estimated 70% of local authority income would be raised locally, compared with "a little over half" under the current formula grant system, he said, describing it as a "giant step for localism".

Under the start up funding £26 billion will be shared between councils across the country.

See more Argus stories about Brighton and Hove City Council's budget plans here.

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