Contact: Jon Pittam, ext 7400

1. Summary

1.1 The report presents an initial summary of the Spending Review 2002 (SR2002) announcement. A further presentation will be made at the Cabinet meeting after more analysis has been done.

1.2 The following decision is required:

· to note the publication of SR2002.

2. Reason

2.1 SR2002 will influence the Council's spending and council tax levels over the next three years.

3. Other options considered and rejected

3.1 Not applicable.

4. Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 Not applicable.

5. Dispensation granted by the Standards Committee

5.1 Not applicable.

6. Reason for the matter being dealt with if urgent

6.1 Not applicable.

Approved by: Date:

Councillor T K Thornber

Contact: Jon Pittam, ext 7400

1. Introduction

1.1 The Chancellor of the Exchequer announced the details of the 2002 Spending Review 2002 (SR2002) of public spending plans for the period 2003/04 to 2005/06, on 15 July. As usual, there is small print that requires interpretation and allocation decisions that have yet to be taken by Government departments. A further presentation will be given at the Cabinet meeting on 22 July.

2. Summary

2.1 An initial summary of the local authority implications is as follows:

· Standard spending assessment (SSA) national control totals for 2003/04 are broadly in line with the Government's previous plans in SR2000, as adjusted for an increase in resources for Social Services announced in the budget

· Spending is planned to continue to increase in real terms in 2004/05 and 2005/06, with cash increases in SSA control totals averaging around 6%, much the same level as in the past two years

· Government support for local authority SSAs is not separately identified but appears likely to increase at a similar level to the increase in spending. This implies that council taxes will continue to rise at 2 to 3 times the level of inflation

· though the Spending Review White Paper indicates that a review of existing ring-fenced grants will take place in the Autumn, there is little evidence that the Government intends to place less reliance on specific grants generally eg:

- the Neighbourhood Renewal Fund is planned to increase from £300m in 2002/03 to £525m in 2005/06

- further increases in direct grants to schools have been announced, despite the introduction of a separate schools block in 2003/04

- only £160m of the additional £360m for Social Services in 2003/04 is being allocated through SSA

- new leadership incentive grants for secondary schools in the most challenging areas and a new grant for supporting capacity building and intervention in local authorities are being introduced

· support for local authority capital investment is planned to increase by 10.7% per annum over the next three years, but details have yet to be published.

2.2 A further presentation on the figures between services, together with what can be ascertained from available information about other changes, including links to performance targets, will be made at the meeting.

2.3 More detailed considerations can be worked up with the development of the budget strategy for 2003/04 in the Autumn.

2.4 SR2002 does show figures by SSA blocks but there is the added complication that further changes will be made when the new formula grant is introduced in 2003/04 (see item 4 on the agenda).

Recommendation

That the publication of SR2002 be noted.