Local highways and transport departments could be spared further financial pain after the communities secretary confirmed that cuts announced in the recent Budget will not affect the previously announced four-year finance settlement from 2016/17 to 2020-21.
Greg Clark confirmed the medium-term financial status of local authorities after fears were raised in a letter from communities and local government committee chair Clive Betts.
However, he reiterated that he ‘cannot guarantee future levels of funding’ for councils that decline to submit to an efficiency plan, thereby rejecting the four-year settlement.
Speaking after receiving the reply, Mr Betts said: ‘Following the move to 100% retention of business rates by 2020 and the multi-billion efficiency savings announced by the chancellor in his Budget, I’m pleased the secretary of state has confirmed that the four-year settlements for local councils are still valid.
‘While local authorities will remain under considerable financial pressure, I welcomed the original announcement on four-year settlements and I’m pleased the secretary of state has now reaffirmed this deal.’
Full retention of business rates is expected to be implemented nationally from 2019/20.
