National Government reduces Elmbridge funding

15 January.  As you might know, the burghers of Elmbridge, per person, are one of the highest contributors of tax to the national government.  Some of this tax is returned to Elmbridge but not much.  This is because, on average,  we are one of the richest people in England. The national government has just announced that the 2013/14 return to Elmbridge will be  11.4 % cash reduction compared to our 12/13 settlement - so an even bigger reduction if inflation is taken into account. This is certainly not a good outcome for Elmbridge but we assumed the worst and we were only out by £23,000, which is a relief.  So for Elmbridge, whilst it's not brilliant news - our predictions have been proved right. The national government plans to reduce the 2014/15 return even further - another reduction of around 12%.  This is much worse than we expected. The provisional figures indicate that Elmbridge will have a £200,000 reduction compared to our forecast. This is bad news as we have to identify another £200,000 worth of savings in addition to the £1,000,000 that we have already identified 2014/15. This large reduction in the returning of our tax 2014/15 is because of: a) The 6.5 % reduction announced in the national government's spending review in 2010. b) The 1% reduction in the return of our tax for 2014/15 announced in the national government's autumn statement of 2011. c) A further 2% reduction in the return of our tax for 2014/15 announced in the national government's autumn statement of 2012. d) A further planned £300,000,000 being taken for New Homes Bonus. The national government's freeze grant for council tax of 1% is only available for 2013/14 and 2014/15.  We have had confirmation that this freeze grant will only be included in the base for two years. The outcome of the settlement  for 2013/14 shows our strategy of prudence against uncertainty is absolutely right. Gradual increases in council tax levels combined with other revenue sources beyond the national government's return of our taxes is even more crucial in future and will help us become more financially resilient.