Local Government Secretary Greg Clark MP announced the “transitional” cash in a statement to Parliament, saying he had listened to the concerns of councils. He also announced what he said was a £90m increase in funding for rural councils in 2017.
Speaking in the Commons, Mr Clark said the provisional local government settlement announced in December – which outlined cuts to central government funding of 6.7% between 2016 and 2020 – would go ahead as planned following a public consultation.
Mr Clark said the state of the public finances meant that any change to the pace of cuts was “extraordinarily difficult” but he said he would be offering additional financial support to councils likely to suffer the “sharpest reduction” in funding in the first two years.
“I will make additional resources available in the form of transitional grant as proposed in the response to the consultation by colleagues in local government,” he said. “The grant will be worth £150m a year paid over the first two years.”
Mr Clark said £32.7m of this funding would be available to rural councils. Coming on top of a five-fold rise in the value of the services delivery grant from £15.5m to £80.5m in 2017, he said an extra £93m in total would be available to meet the concerns of rural councils.
“This proposal means there is no deterioration in government funding for rural areas compared with urban areas for the years of this statutory settlement,” he told MPs.