Councils fear cash drain to shires

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Indy Lifestyle Online
London's borough councils could lose pounds 190m during the next financial year, the Association of London Authorities (ALA) will warn the Government today.

The ALA fears that further changes to local government finance, announced in the Chancellor's Mansion House speech last Wednesday, will take money away from the capital and feed it to the shires.

The Government offered to cushion the effects of recent changes with a 'damping' grant to London authorities losing more than two per cent of grant. However, no guarantees were made that the grant would continue beyond this year.

The ALA is also concerned about the implications of Kenneth Clarke's apparent determination to clamp down on public spending, which could leave local authorities poorer still.

'The new system of local government finance is skewed towards the shires, which generally have fewer needs than the cities,' said Toby

Harris, chairman of the ALA, who will preside at the meeting with the local government minister David Curry today.

'If the Government will not consider changing its unfair system, at least it must continue to cushion its effects. Unless the system is properly phased in, Londoners will soon face paying more money for fewer services,' he said.

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