Vital services at risk as county "hammered" by funding cuts

County councillors have agreed to implement a core council tax increase of 2.99 per cent (DCC's share of the bill) after being awarded new freedoms to raise core tax by an additional one per cent – as opposed to the previous 1.99 per cent cap.

However, according to the County Councils Network (CCN), these new freedoms will raise just one fifth of what is being cut from DCC's budget – putting local services under threat.

CCN figures show DCC faces a 60 per cent drop in its core funding by 2020 – the second highest percentage drop out of the 37 counties in England.

During the cabinet meeting, Cllr Tony Ferrari said Dorset had been badly affected by recent changes to local authority funding – specifically the creation of negative revenue support grant (RSG).

The RSG – central government funding to local authorities – was slashed in 2016/17.

To replace the grant, councils will potentially be able to keep all business rates generated in the county – a transition which is taking several years to implement.

However, the speed at which RSG was stopped left councils facing steep cuts and last year DCC found themselves with 'negative' RSG of £2 million – which was covered by a one-off transition grant.

In the financial year 2020/21, DCC will see the implementation of 75 per cent retention of business rates but for the year 2019/20, DCC's negative RSG stands at £10.1 million – which will have to be paid back to central government.

DCC's chief financial officer, Richard Bates said the idea of a negative grant was "utterly bizarre."

Cllr Ferrari said: "We are talking to central government about it but from their perspective it's a minimal issue but from ours it's significant."

Cllr Ferrari said he hoped the grant owed would be removed but "the possibility of a negative grant of £10 million still exists."

Furthermore, CCN claims Dorset faces a reduction of £9.9m in funding over the next two years but the extra one per cent on council tax will raise just £2.069m –failing to offset these reductions in funding.

Cllr Jill Haynes said Dorset was being 'particularly hammered' by funding changes.

She added: "There are rumblings certainly in my division that, while the parish councils understand there is pressure on social care, they do not understand why we are making these changes – there are rumours of mismanagement.

"We haven't done a good job of explaining to people why we are in this situation. I think people don't understand we are working very hard and we are still looked at as if we are not doing a good job."

Leader of the council, Cllr Rebecca Knox said: "Transparency around where our money goes needs to be out there."

Leaders face 'unpalatable' decision

Vital services could be axed in Dorset as county areas are 'unfairly penalised' by steep funding cuts.

According to the County Councils Network (CCN), county leaders could be forced to make ‘unpalatable’ decisions unless their government rethinks its funding allocations to local authorities.

CCN warn that bus services, children’s centres, and libraries will have to be cut, new charges will be introduced for social care services, whilst there will be less money for road maintenance and pothole repairs.

The network said counties are unfairly penalised, as Dorset County Council’s core funding will reduce by 60 per cent between 2015 and 2020, compared to 22 per cent on average for councils in London and 28 per cent for urban, city, and metropolitan authorities.

Due to continuing cuts and what CCN called an ‘outdated and unfair’ funding system, residents in counties will receive just £161 of core funding per head by the end of the decade compared to an England average of £266 and £459 in London.

Cllr Paul Carter, Chairman of the County Councils Network, said: “Over the past seven years shire counties have faced the toughest financial challenge of all.

“The ending of essential grants this year for frontline and life-critical services means we are facing some truly unpalatable budget decisions, which will see rural bus subsidises all but end, new charges for care services, children’s centres and libraries disappear and potholes go unfilled.

“Even if counties raise council tax under these new freedoms, it won’t prevent many of these service reductions taking place. Residents in rural counties will be asking why they are paying so much more in council tax than anyone else but receiving so much less."