Council Leader Ruth Dombey has described Government claims of a 3% cut in ‘spending power’ to local authorities as ‘disingenuous’ with almost a fifth of Sutton Council’s allocation being removed.

Sutton Council received £79.6m from Central Government in 2013/14. Under plans announced yesterday, the Government will only grant the council £74.1m in 2014/15 and £66.1m in 2015/16. Together, that equates to a cut of £13.5m or 17% over two years.

Central Government has claimed that it is only making a 3% cut to ‘average spending power’ in 2014/15, but did not make any reference to a further cut in 2015/16.

Sutton Council believes the 3% claim is also misleading as it looks at average spending power which combines the council settlement, known as the Settlement Funding Assessment, and money generated by local authorities through council tax – an approach which masks the true 17% cut to the settlement itself.

To make matters worse, the Government has decided that local authorities in London will have to give 35% of their New Homes Bonus Grant to the Mayor of London from next year. The grant, which provides councils with funding based on how many new homes are built in their borough, was due to give Sutton Council £2.5m in 2014/15 and £3.2m in 2015/16.

Cllr Simon Wales, Lead Member for Finance on Sutton Council, said:

“Yet again the Government has failed to recognise the reality of delivering public services. It is simply disingenuous so say that it is only a 3% reduction in funding when the reality is that it is 17%.

“Local councils have shown that they can make more efficient use of public money when centrally held budgets are handed over to us. However, what we are seeing at the moment is even more power and funding being taken away.

“We have already made £32m of savings without frontline services being affected. There is no doubt that these further cuts will impact on the quality of life of our residents.

“We can only do so much with the money we have and, together with our residents, we are going to have to make some difficult decisions about the services they receive.”