Spending Review: Chancellor conjures up 'cuts protection' for local government

The Chancellor claims today that local government will be able to spend the same in cash terms by the end of this Parliament as it does today, through increased income from business rates and from keeping all the receipts from property sales.

George Osborne confirmed he was pressing ahead with phasing out grant and replacing it with allowing councils to retain all business rates raised in their areas. He announced that he would also allow councils to keep 100% of the receipts from selling off their £250bn in property.

Osborne, whilst turning a deficit into a budget surplus, will cut transport day-to-day spending by 37% by 2020, but increase transport capital spending by 50%, to a total of £61bn by the end of the Parliament, or £11.4bn a year.

"We are the builders," he declared, also giving £11bn for London transport infrastructure, £5bn for roads maintenance, and also "a permanent potholes fund" of £250m, fulfilling a pledge for £300m for cycling, and confirming the start of construction on HS2 and work will re-start on paused rail electrification schemes for northern England.

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