Lancaster City Council says it is carefully scrutinising the provisional Local Government Finance Settlement to determine its impact on the council’s budget and future service provision.
On Monday, the Government announced that the city council’s grant, which forms the majority of the money the council receives to run its services, is to be cut by 13.8% in 2011/12 and 10.9% in 2012/13.
“Because of previous Government announcements we had anticipated that our grant was going to be cut and, this does, as expected, leave the council in a challenging position," says Liberal Democrat Coun Stuart Langhorn, leader of Lancaster City Council.
“However, Cabinet has already started the process and is meeting regularly to draft a budget for consideration by Council.
“While many of the discussions are still in their formative stages, it is clear that we will have to make real cuts to our services if we are to balance the books.
“We will be examining the budget carefully to ensure that all our services contribute towards the council’s priorities.”
The Council is considering a recommendation from Cabinet today to freeze Council Tax in 2011/12. If Council approves the recommendation the Government will provide additional funding equivalent to a 2.5% rise.
Taking this and the settlement into consideration, Lancaster City Council will have to find savings of £799,000 in 2011/12 and £1,934M in 2012/13.
This is sure to mean massive reductions in services and staff redundancies.
Cabinet will present its draft budget to Council on 2nd March 2011.