Deal or No Deal with council cash

Councils are having to decide what deal to take in the face of tough budget decisions

The annual sharing out of cash for local services is always fraught, and never seen as fair.

The mandarins in Whitehall call it The Settlement - as if funds were being bestowed by some aged aunt on her poor country cousins.

Of course, in the town halls they see it the other way around - business rates collected in the shires of England on behalf of the squire, who might deign to pass some back to help education or the care of the poor.

This year devolution has rocketed the process into the modern world.

Councils are asking for flexibility and the ability to plan ahead.

So Secretary of State Greg Clark is offering a four-year deal and has loosened restrictions on the deals councils can do.

Now they can behave like any modern corporate body, choosing whatever they want to invest in, borrowing money at market rates, even varying the rates of pay for their staff.

By the end of the four years councils will keep 100% of business rates collected, but that grant from central government is getting a lot smaller, in many cases disappearing altogether.

For some that won't matter. East Hampshire District Council is blessed with the opportunity to build new houses, especially around the former military camp of Bordon.

The Secretary of State Greg Clark has promised to look at the Isle of Wight's predicament

The New Homes Bonus payments, plus income from charges and investments means it can cut council tax this year by 2%.

Leader Ferris Cowper says this is a statement of intent: "Our financial strategy is radical and unique.

"Where many councils cope with a drop in income by raising taxes or cutting services we have decided to go a different way."

At the other extreme the Isle of Wight Council says it simply cannot provide services required by law on the settlement announced this week.

Leader Jonathan Bacon, an Independent leading a ruling Independent group, welcomed Greg Clark's promise to visit the island as part of a review.

"I cannot see any way the council can set a lawful, balanced budget for 2017/18 based on the current planned funding allocations from government. The review must, therefore, be completed in the next six months for the council and the island to have a sustainable future and must result in us receiving the funding we currently lack," Mr Bacon said.

Labour picked up on the extra money for shires, claiming 85% of additional funding was going to Conservative councils. But the claim was rejected by Hampshire leader Roy Perry.

He said: "Under the initial allocation announced just before Christmas, the Revenue Support Grant for Hampshire was just £139.80 per dwelling - a reduction of 37% on the previous year, whereas Metropolitan areas such as Barnsley were allocated £288.70 per dwelling, and Manchester £441.23. "

The Secretary of State Greg Clark is something of a smiling assassin, conducting the debate to win parliamentary approval in the face of a threatened Conservative rebellion with the easy charm of a game show host.

We have the call from the banker who's found £300m pounds to buy off dissent. Deal, or no deal?

The next decision councils face is whether to risk the four-year deal or continue to negotiate an annual settlement.

Open the box, or take the money. Under devolution, the decision is yours.