An increase in capitalisation has been announced which increases by 50% the amount available to £300m.

Responding to the announcement that councils will get an extra £100million in the capitalisation fund, Baroness Margaret Eaton, Chairman of the LGA, said:

We warmly welcome this announcement. It is very encouraging that the Government has listened to our concerns and agreed with the LGA’s request to increase the amount that councils can spend from their own capital resources to help pay for redundancy costs.

The extra £100million available to councils will go some way to easing the pressure as they face the tough task of setting their budgets.

Giving councils greater flexibility over their own capital resources is a common sense approach to helping them give taxpayers the best possible value for money.

It means they will not have to dip so far into their revenue budgets to pay for redundancy costs, potentially saving jobs and limiting the impact on front-line services.

More on capitalisation.