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Pickles: 'Councils must do their bit'

An estimated 70% of council income will now be raised locally compared to 56% under the centrally-distributed "begging-bowl" Formula Grant system, according to the Communities and Local Government Department (DCLG).

From April 2013, councils can channel this greater local control into encouraging local jobs and local firms via a new business rate retention incentive that rewards them for growth. It could potentially add £10 billion to the economy by 2020.

– Communities and Local Government Department

The DCLG also published 50 examples of where it believed councils could save money, ranging from opening a coffee shop in libraries to scrapping the post of chief executive.

Councils must keep doing their bit to tackle the inherited budget deficit because they account for a quarter of all public spending and still get through over £114 billion of taxpayers' money each year.

– Eric Pickles, Local Government Secretary

Labour slams council cuts plans

Labour said that funding cuts to councils will have a huge impact on services, and claimed that Local Government Secretary Eric Pickles is "out of touch".

It is clear that he is living in a world of his own, because he simply does not understand the impact that his decisions on funding are having on the services and local people who use and rely upon them.

– Hilary Benn, Shadow communities and local government secretary

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Pickles: 'Some councils must make more savings'

Local Government Secretary Eric Pickles told the House of Commons that a small number of local authorities will require larger savings to be made, but he said that no council will face a loss of more than 8.8% of their total spending power thanks to a new efficiency support grant;

As the name implies, to qualify, councils will have to improve services to receive this grant. It is unfair on the rest of local government to expect them to subsidise other councils' failure to embrace modernity.

Mr Pickles said councils were "sitting on" a record £16 billion of reserves.

Spanish government announces cuts of €26 billion

There have been more riots in Spain tonight as against the drastic austerity measures announced by the new government.

It announced it plans to cut government spending by twenty seven billion euros, or twenty two billion pounds.

Spain already has the highest rate of unemployment in Europe; twenty four percent of people are currently out of work.

Our economics editor Richard Edgar reports.

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