The vital work of building a fairer funding system for local government started with the £600m Recovery Grant, which was targeted at deprived places with low council tax bases - exactly the areas that had seen the biggest cuts during austerity.
The ongoing funding review can build on the Recovery Grant and has the potential to complete the job of building a fairer system. So, it was very welcome to hear comments from Minister Jim McMahon recently at the HCLG Select Committee. At that oral evidence session, the Minister said that in parts of the country that were ‘poorer, more deprived, more post-industrial parts, with lower tax bases' the previous governments had ‘walked off the pitch', something which I couldn't have put better myself.
It was also welcome to hear the Minister comment that he saw the Government as an ‘equaliser' in the system ‘to make sure that all local authorities can deliver local public services'. This is something we strongly believe in and is why we are calling for 100% council tax equalisation – the principle here is that the strength of your local tax base shouldn't determine whether you can deliver quality local public services.
The upcoming Spending Review represents a significant opportunity to reduce regional inequalities through new capital investment across the country targeted at left-behind communities
However, while there are clear positive steps on local government finance, these need to be supported by action on the cost-of-living crisis and investment in the most deprived communities.
After a decade of austerity which has had a devastating impact on the most deprived communities, the focus should be on reducing regional inequalities. The proposed changes to local government finance can do this, but the Government is at risk of undermining this progress with changes to the benefit system, including the changes to the winter fuel allowance threshold. Instead, the Government should rethink the benefit changes and provide concrete action on the cost-of-living crisis. This could include raising the eligibility threshold of free school meals and supporting free travel for under-18s.
The upcoming Spending Review represents a significant opportunity to reduce regional inequalities through new capital investment across the country targeted at left-behind communities. We need investment in every part of the country, not just in places like London and the South East that can provide the quickest immediate return. There are significant regional differences in economic output, and there is clear economic (and political) sense in investment to bring less economically successful places up to speed.
The Government have been making very encouraging progress on fixing the broken local government finance system, but this will mean little without also investing in the most deprived communities and delivering support with the cost-of-living crisis.
Cllr Sir Stephen Houghton, Chair of the Special Interest Group of Municipal Authorities (SIGOMA)
