News Roundup: Council spending, Growth fund allocations, Infrastructure investment, Dundee bail-out
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Council revenue spending on the rise
Total revenue expenditure by local authorities in England was £96.4 billion in 2013/14 , an increase of 2.4 % from the previous year, according to new government figures. The announcement follows last week’s report from the DCLG showing capital spending also increased over the period. Local authorities received £2.7bn from central government towards public health for the first time in 2013/14 as a result of the Health and Social Care Act.
Local Growth Fund allocations announced
The government has set out the allocations for a further £1bn from the Local Growth Fund. The biggest winner was the Heart of the South West local enterprise partnership, gaining £65.2m, while London’s LEP took £58m. A number of LEPs which were granted funding during the first round last year, got extra cash, including Cumbria, which received an additional £20.9m on top of its original £26.8m.
Regeneration investor seeks local authority partnerships
The insurance (is this the insurance business doing this? – it is L&G Group – refered to as an insurer by Reuters) firm behind a newly-created regeneration fund says that it would be happy to work with local authorities to develop sites. This week, Legal & General said that it was committing £1.5bn to the fund and is hoping to attract an extra £15bn from co-investors. A spokesman for L&G said: “If a council is putting its own money into a project, that shows commitment, and that could clearly be an attractive proposition.”
London and Manchester funds create infrastructure pot
The London Pension Fund Authority has signed a deal to create a £500m infrastructure fund, almost a year after it pulled out of the Pensions Infrastructure Platform. Last week, LPFA and GMPF announced that each would invest £250m into a new fund to invest in infrastructure opportunities. Luke Webster, director of finance at LPFA, told Room151: “Clearly we do consider infrastructure a good investment. We think it sits well within the Local Government Pension Scheme context because it allows a long-term investment perspective to be taken.”
Bail-out for Dundee museum
Dundee City Council could borrow £12.6m from the Scottish Government under a new mechanism to help cover a £31m overspend on a landmark new building. The cash would be lent to the council through the Growth Accelerator Model arrangements, similar to tax increment financing. Income raised through the scheme would repay the initial borrowing. This week, the council announced that construction costs for the new V&A building had risen from £49m to £80m.
Rising social care costs hit other budgets
The rising cost of caring for the elderly will have to be funded by taking £1.1bn away from other council services, according to the Local Government Association. The LGA said that adult social care, at £14.6bn is now the biggest mandatory services provided by local authorities – now making up 35% of spending, compared to 30% in 2010/11. Rising demand means squeezing other services, it added.
Pension funds launch investment reporting guide
Five Local Government Pension Scheme funds have joined up with 11 private funds to launch a guide to responsible investment reporting in public equity. The LGPS funds are West Midlands Pension Fund, Lothian Pension Fund, Merseyside Pension Fund, Strathclyde Pension fund and the Environment Agency Pension Fund.
Councils to keep fracking business rates
The government has rejected calls from county councils that they should get 100% of business rates collected from companies fracking in their areas. In its response to a consultation released this week, the Department for Communities and Local Government said that central government would not take any of the rates collected. However, it said that in two tier areas counties would get 60% with districts getting the rest.
Think tanks moots billions in tech and data savings
Local government could save £10bn through the use of technology and data sharing, according to think tank the Policy Exchange. The body said that the single greatest barrier to achieving technology-enabled reform is the sector’s fragmentation. It said that a new local government digital service could provide an online app store for councils to share technology.
