A proposal claiming to simplify the distribution of grants by stopping grant allocations from being weighted by relative deprivation and poverty levels of areas has been announced by the Government.
The proposals will take relative deprivation out of the statistical formula used to allocate funds for several services, such as public transport, libraries, leisure centres, family planning, and homelessness, which is around 30% of the budget given to councils each year. Under the legislation the funds would only be rated on the higher costs of running services in rural areas, and not offset by the deprivation of many urban areas, leading to a net gain in average funding for most rural areas at the expense of lower than average funding for deprived urban areas.
Several politicians, most notably local Councillors of urban areas known to have high levels of relative poverty and deprivation, where the largest portion of grants are currently allocated, accused Tory ministers of sparing their own supporting councils while “piling misery” onto more deprived and more left-leaning parts of the UK.
A recent poll found that the United Kingdom has the second highest poverty levels in the European Union, second only to Romania, and higher than both Greece and Spain, two countries known for their economic instability and high levels of poverty and deprivation in recent years.
The backlash, from primarily Northern and metropolitan Council members and their constituents, accused the Fair funding review of local government grant funding as an attempt to alleviate the damages facing the local services of Tory strongholds from austerity cuts at the expense of many more deprived, urban constituencies. These austerity cuts have also been pushed by the same people in the past currently advocating for the new plans.
Sir Stephen Houghton, the current leader of Barnsley Council, called out the Government for their “illogical” plans, and that more deprived areas naturally require higher costs to run local services, especially services such as homelessness, public transport, and street cleaning.
In the past, grants were distributed more often in poorer areas due to the increased need for social care and affordable and council-run housing, as well as the established fact that more deprived areas are far less able to sustain taxes to the level of more affluent areas.
The Ministry of Housing, Communities and Local Government are currently putting the legislation through consultation with not set date for when the legislation goes to the House of Commons to be voted on.