Written - Welsh Local Government Revenue Settlement

On 7 October the Minister for Finance and Public Service Delivery announced the Welsh Assembly Government’s draft budget proposals for 2009-10 and 2010-11. The draft Budget included an additional £10 million for Welsh local authorities in unhypothecated revenue support grant for 2009-10 and a further additional £10.5 million for 2010-11. This brings the overall level of the year on year increase in revenue support grant for the two years to £105 million or 2.8 per cent and £ 112 million or 2.9 per cent respectively after adjusting for transfers.

In addition to increased revenue support grant yesterday’s draft Budget announcement included additional money for local authorities through specific grants, in particular for the Foundation Phase and Concessionary Fares. Local authorities will be entitled to in excess of £650 million in specific grants in 2009-10.

I intend to make a more detailed announcement on Wednesday 15 October in respect of the provisional local government revenue settlement for 2009 -10. It will comprise details of the amount each local authority will receive in support towards its spending from the Welsh Assembly Government in Aggregate External Finance (revenue support grant and re-distributed non-domestic rates).

For 2008-09 I have made additional money available to fund a floor arrangement whereby every local authority in Wales was assured of a minimum increase. Given the unprecedented fiscal and public expenditure context to this Budget round I have decided to retain a floor funding arrangement for 2009-10.

The additional £10 million in funding announced in the draft Budget incorporates the resources to do this. I have decided to set the threshold for 2009-10 at 1.5 per cent.

The draft Budget document includes the Welsh consequential (£3m for 2009 -10 and £6 million for 2010 –11) of the money provided in the 2007 Comprehensive Spending Review for any successor arrangements to the Local Authority Business Growth Incentive Scheme which came to an end in 2006-07. I have taken account of the very clear messages coming from a consultation exercise conducted which recommended that the money should be included in the RSG. I have agreed with this advice.