Birmingham has now received details of its Formula Grant from Central Government. The Formula Grant provides the majority of funding towards the nett cost of the Council’s services and is much larger than the amount raised by Council Tax in the City. On a like for like basis Birmingham’s Formula Grant is being reduced by 10.2% in 2011/12 and 7.3% in 2012/13. The Council also gets funding from a number of specific grants. When you add in the nett impact of the changes in these grants the overall ‘spending power’ of the Council reduces by a little less than the Formula Grant cut; 8.32% in 2011/12. In cash terms this overall reduction is from £1,265.326m to £1,159.996m – a reduction of £105.33m. While extremely tough it somewhat better than the planning figures the Council had been using, which were for a reduction in Formula Grant of 10.9% next year and a cut in ‘spending power’ of £110m. The Formula Grant figures for 2012/13 are exactly as assumed. How exactly this all will be achieved has been the subject of much intense work over recent months and will almost certainly continue to be worked on until just before the 2011/12 budget is set on 1st March 2011.