A DECADE-long series of “low profile” government policy decisions will mean deprived areas outside of London will have lost out on almost £1bn in local authority funding by 2020, according to an analysis by a cross-regional coalition.
Complex local government finance formula mean the cuts have been “swept under the rug”, allowing them to be skewed in favour of some of the most affluent areas of England, the Special Interest Group of Municipal Authorities (SIGOMA) claims.
The group of 46 urban authorities in the country’s North, Midlands and South coastal regions say successive funding decisions have come at the expense of regions like Yorkshire, which it says will have lost out on more than £198m over the ten years since austerity began in 2010.
The group now insists that “enough is enough”, with a proposal from the Ministry for Housing and Local Government to eliminate negative revenue support grant via forgone business rates receipts set to “gift” £153m to wealthy authorities.
Coun Stephen Houghton, leader of Barnsley Council, who heads the SIGOMA group, said: “These latest proposals are the final straw in a pattern of policymaking that has consistently adjusted settlements in favour of some of the wealthiest parts of the country and forced councils in regions like Yorkshire and the Humber to cut further and faster than most.
“Local government finance isn’t the most exciting subject, so these issues are easily swept under the rug due to the technical jargon that surrounds them.
“In fact, the system is so opaque that government is able to continue claiming its decisions are fair, just as it channels scarce funding to the wealthiest parts of the country.
"The grim reality is that austerity has not been distributed evenly and some of the wealthiest councils have been consistently insulated from the worst of it by deliberate decisions made in Westminster.
“But the cumulative impact of all this in practice means more deprived areas that face greater costs to support vulnerable residents, our grandmas and grandads and children who don’t have anyone else to look after them, suffer.
“Quite simply, it isn’t fair. When towns like Bradford and Kingston upon Hull who have lost over 25 per cent of core funding get nothing whilst areas like Surrey who have lost just four per cent get £27m out of this latest proposal you know something has to be wrong.”
The group of local leaders wants the Government drop its plans to scrap the negative revenue support grant in this year’s Finance Settlement, which will be finalised in February next year.
Coun Houghton said: “We want to see the Government allocate any additional money to local government based on need, not political convenience. The £153m they are proposing to gift to wealthy authorities this time has the technical guise ‘elimination of negative revenue support grant’ but there is no logic to it and it is going largely where it is least needed. It is £153m they could have allocated to support the chronically underfunded children’s services, rather than playing favourites.
“This isn’t a large sum of money in government terms, but with this and similar initiatives Government have diverted over £700m into wealthier regions. It indicates a direction of travel that raises deep concerns about how funding will be fundamentally redistributed between councils in the forthcoming 2019-20 Funding Review, which could lock in disadvantage of regions like Yorkshire and Humber for a long time to come.”
Coun Judith Blake is leader of Labour-run Leeds City Council, which is part of the SIGOMA group.
Coun Blake said: “Local authorities in the north will support the campaign to ensure a much fairer distribution of funding.
“I think it is a cynical political decision to favour areas that vote Conservative and this must be addressed.”
The Government insists its proposal to eliminate negative revenue support grant via forgone business rates receipts is “a fair and cost effective way to resolve negative revenue support grant.
A spokesman for Ministry of Housing, Communities and Local Government said: “Although the Government has a preferred option for resolving this issue, we recognise there are a range of views across the sector.
“Our consultation laid out in detail alternative approaches we have considered and we have welcomed all representations. We will closely consider the responses received.”