Grants review could hit county councils

An adviser to MPs has warned that county councils could lose
millions of pounds a year under proposals to change the way
government grants are allocated.

Rita Hale, an accountant and director of consultancy Rita Hale
& Associates, said all three options proposed in the
government’s consultation paper for reforming the way the standard
spending assessment is calculated would involve cutting
revenue-spending grants in almost every county council.

At the same time, all 12 inner London boroughs would gain from two
of the three options, with three quarters benefiting from the third
option, she said.

Hale, who advises the House of Commons select committee on local
government finance, was speaking last week to members of the Local
Government Association. They were attending a conference on the
local government finance formula grant distribution.

Meanwhile, in a review of fostering costs within the wider review
of local government funding, the consultation document proposes an
option of giving councils with high levels of deprivation and large
ethnic minority populations more money to cover the costs of foster
caring.

The proposal aims to reflect the extra resources needed to recruit
and retain foster carers in some areas.

Henry Rogers, who headed the Department of Health’s social services
spending review, said there was evidence to suggest that social
class and ethnicity were good indicators of increased foster care
costs.

“It could be that low earning people are more prepared to become
foster carers, and maybe people from ethnic minority backgrounds
are more difficult to place,” he said.

– Local Government Finance Formula Grant Distribution
consultation paper from www.local.dtlr.gov.uk/review/consult/index.htm
– consultation ends 30 September.