Member News
By Dave Watts MP - 28th July 2011
Dave Watts MP says that local government spending cuts could penalise the very communities that the government claims it wishes to protect.
When the Special Interest Group of Municipal Authorities (SIGOMA) launched its latest document – "All in this together" - it set out its call for the government to deliver its commitments for a fair approach to cuts that we all knew were coming.
SIGOMA Authorities have been 'catching up' over recent years on resources denied them, through previous grant regimes that took insufficient notice of the real levels of deprivation.
There was therefore obvious concern around this year's funding cuts which started to reverse that progress by having a disproportionately negative impact on the more deprived.
As chair of the SIGOMA MP's group, it was therefore with some dismay that I considered the announcements in the Spending Review that appear to have the potential to follow the same pattern and penalise the very communities that government has claimed it wishes to protect.
The abolition of the Working Neighbourhoods Fund, in isolation, will hit many of the countries most deprived areas very hard and it is feared that the damage could be even more severe.
The proposed 'top slicing' of the Formula Grant to provide funding for a Council Tax freeze, will in itself move resources away from more deprived areas with relatively low tax bases to generally less deprived areas with greater local income generating capacity.
But by far the greatest concern over the delivery of a fair settlement is the extent to which Local Authorities depend on central government grants. This dependency varies significantly across the country, the greater the dependence on grant funding the greater the vulnerability to funding cuts if the focus is entirely on that source.
Without direct action by the government, we could see some of the most deprived District Councils experiencing reductions of as much as 30 per cent and severely deprived areas such as Liverpool and Hackney losing around 12 per cent in overall total funding in the first year alone.
On the other hand, more affluent, areas such as Richmond upon Thames and Surrey could see reductions in overall funding of as little as 2 per cent, as their Formula Grant cuts are almost entirely offset by Council Tax freeze grant.
Clearly such anomalies could not in any way be described as 'fair' or as upholding the government's pledge. Positive action need to take place to ensure this potential outcome does not materialise.
Dave Watts has been MP for St. Helens North since 1997.
Throughout recess, ePolitix.com will be focusing on a different policy theme each week. This week we are featuring MP articles with a focus on the public sector and government cuts.
This article was first featured on November 30th 2010 ahead of Dave Watt MP's Westminster Hall debate on funding for local government.
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