Comment: Council cuts will hit deprived areas hardest

Dave Watts is the Labour MP for St Helens North
Dave Watts is the Labour MP for St Helens North

The government has claimed to be championing itself as a protector of the most vulnerable in the spending review. A closer look at cuts to local government reveals that less affluent areas stand to lose out most.

By Dave Watts MP

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 country's 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% and severely deprived areas such as Liverpool and Hackney losing around 12% 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%, 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 needs to take place to ensure this potential outcome does not materialise.

Dave Watts is the Labour MP for St Helens North.

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