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Executive Leader Cllr Brenda Warrington

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Councillor Brenda Warrington, Executive Leader of Tameside Council

We Need A Real Fair Funding Review

Thursday, 24 January 2019

The start of this week saw the release of the government’s consultation on the latest Fair Funding Review. Once finalised, this review will be important in determining how much funding councils such as Tameside receive in 2020-21. In the past, many of these consultations and reviews have only really been followed by people working within politics or local government. However, for a couple of very good reasons, I’d argue that this particular Fair Funding Review is one that anybody who is interested in the future of our vital services should take a serious look at.

The first reason is, despite what the Prime Minister and Chancellor tell you, that the age of austerity is very much alive and well in local government. Council funding has been cut by over half since 2010; where once we had £1 to spend on services 9 years ago, we now have 40p instead. The latest research from the Local Government Association (which, let’s not forget, contains representatives from every political party in local government) estimates that, even if you include the resources announced in the Autumn Budget and the Local Government Finance Settlement, the funding gap in local government for 2019-20 remains at over £3 billion.

Here in Tameside, we estimate that a further £70 million cuts over 5 years will be needed to balance the books for the council and the Clinical Commissioning Group, and getting your views on what we need to prioritise is one of the reasons why we launched our Budget Consultation at the end of last year (Incidentally, if you haven’t given us your views on the Budget Consultation yet, you can still do so until 29th January on the website here). Despite this dire financial situation, the Fair Funding Review contains no increases in overall funding for local government.

We know as well that none of these cuts have fallen equally. Indeed, they have fallen disproportionately on the most deprived and vulnerable parts of the country. The government’s own figures on overall service spend since 2010 show that cuts to metropolitan councils like Tameside have led to a 25% reduction in service spend, while the same cuts at shire and county councils have resulted in a comparatively light service spend reduction of 13.2%.  Making the difficult decision to increase council tax also does little for more deprived councils, as a 1% increase in a metropolitan council like Newcastle would raise around £1 million a year compared to the £13 million that the same 1% increase would raise in a shire council like Surrey.

You’d think this level of financial inequality would demand serious action; however this is where the Fair Funding Review goes from just another piece of austerity to something much worse. Hidden in its small print is the recommendation that the increased costs of poverty and deprivation should no longer be considered when it comes to allocating funding, and that greater weighting should be given to population and rurality instead. In plain English, this means that hundreds of millions of pounds of funding would be snatched away from councils like Tameside and given to leafy shire councils in the South and Midlands.

I don’t have a problem with the principle of shire councils receiving more money, because there isn’t a single local authority in the land that hasn’t struggled under austerity to a greater or lesser extent. However I do have a problem, a very serious problem indeed, with making some of the most deprived areas of the country even more deprived in doing so. At the time where some argue that our country has never been so divided, the government is forcing the gap between the “have” and the “have nots” even wider. The price, as always, will end up being paid by the people who depend upon the services provided by local government the most.

The only lasting solution remains the same as it’s always been, the age of the austerity must be ended once and for all. To steal a line from one of our local MPs Andrew Gwynne, we need a bigger cake instead of trying to cut a shrinking one different ways. A completely new local government funding formula, based on a realistic look at what every council needs instead of what is politically convenient for Downing Street, is needed now more than ever. Wait any longer and it may end up being too late.


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