Town Hall signAndrew Gwynne MP has highlighted new research by the Special Interest Group of Municipal Authorities (SIGOMA) that suggests the North West will lose around £320 more than the wealthy Home Counties in the next round of local government budget cuts.

SIGOMA’s latest report on local government funding plans has uncovered the startling fact that the average council in the North West will lose £665 per person compared to those in the South East, where councils only lose £305 per person by 2017/18. The large disparity in funding is putting some councils at breaking point, and means that any economic recovery may bypass parts of the UK.

The Coalition Government has moved away from funding councils according to what local people need. For example, both the Council Tax Freeze Grant and New Homes Bonus have been funded through top slicing the needs-based revenue grants and the data clearly shows that both grants are moving money away from those most in need.

In addition, the Government has failed to consider the cumulative impact of their reforms on councils, only assessing one change at a time. The large number of changes means that the same councils are being hit again and again with cuts in funding. Following years of disproportionate funding cuts councils have had to find significant savings so far; with opportunities for further savings now harder to find and given the rising cost of adult social care, some services are now at breaking point.

Andrew Gwynne MP said:

“Councils with the most residents with the greatest need, like Tameside Council, are facing the highest levels of cut. This is wrong and means that we can’t give help to people who need it most.

“The Coalition Government needs to act now to limit the damage. Fair funding of local councils would help reduce the gap between the rich and the poor and ensure that we don’t fail the most vulnerable people in the country.”

Sir Steve Houghton CBE, Chair of SIGOMA and Leader of Barnsley Council, said:

“SIGOMA’s report shows the Government’s complete disregard for the mounting pressure faced by certain councils and the pain it is causing their residents. The Government must make fair funding a key priority to allow councils to provide essential services without the growing distraction of a service failure.”

Council leaders and the LGA have warned of the risk of service failure from further cuts and nervously await the outcome of the upcoming Local Government Settlement for 2014/15 following the Autumn Statement. This Settlement alongside the allocation of funding for Clinical Commissioning Groups could well worsen their situation.

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