News story

20th November 2003

"South Gloucestershire Tax" Lives On

Northavon MP Steve Webb has condemned a Government announcement that a £4
million “tax” on the grant to South Gloucestershire Council is to be extended for another year. Under council funding rules introduced by the Government for 2003/04, the Government put a “floor” under the grant of councils who would otherwise do badly out of the new rules. This “floor” was financed by imposing a “ceiling” on the grant increases paid to other authorities who should gain from the new funding rules, including South Gloucestershire.

This year the ceiling deprived South Gloucestershire of well over £4 million in Government grant, but it had been widely assumed that this would be a temporary measure whilst the new funding rules were phased in.

However, this week the Government has confirmed that a strict system of floors and ceilings will again apply, once again depriving South Gloucestershire of more than £4 million. This is money that the new funding formula says that the area needs, but which the Government takes away to subsidise other councils.

Northavon MP Steve Webb has reacted angrily to what he has called a “South Gloucestershire Tax”. He said:

“It was bad enough to be deprived of millions of pounds of badly needed cash for one year. But to have a draconian ceiling applied for a second year beggars belief.

"I thought they were supposed to be bringing in a new and fairer system. At the rate they are going, it will be years before we see any real benefit. As a result, we will see yet more pressure on schools and social services, and yet more pressure on hard-pressed council tax payers. This cannot be allowed to go on”.

The MP said he would continue to put pressure on the Government over the coming weeks to look again at the effects of this ceiling on South Gloucestershire’s funding, and urged local residents to write to the Deputy Prime Minister to protest at the plans to remove grant from South Gloucestershire for a second year.


Note: The Government made its annual Local Government Settlement statement in the House of Commons at 12.30pm on Wednesday 19th November, 2003. Click here to read the statement.