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Councils across London are struggling to cover essential staff costs, after poor Area Cost Adjustment (ACA) from the Government. The knock-on effect means Londoners are losing out on £180m of funding for council and education services each year. London Councils admitted the Government ‘generally recognises' the capital's local authorities must pay higher salaries to recruit and retain staff through the ACA grant supplement. However, last year, more than 25 important government grants to councils and schools, which were intended to cover staffing costs, did not include this supplement. ‘The Government's failure to compensate high-cost areas for unavoidable extra wage costs is putting huge pressure on schools and councils, robbing Londoners of the services they deserve,' said London Councils chairman Cllr Merrick Cockell (above). ‘This unfair and inconsistent method of funding education and council-run services has to stop.' In 2006/07, London's councils and schools missed out on £120m of education funding after education grants ignored the extra cost of salaries. During the same timeframe, the capital's councils also missed out on almost £60m of resources, including £22m neighbourhood renewal funding and £20m of Sure Start funding. The Special Interest Group of Municipal Authorities (SIGOMA) has claimed de-prived areas are subsidising ‘wealthier' London boroughs on social services. A SIGOMA report, published last week, said the Government had previously recognised an anomaly in the way social services funding was calculated, and agreed a new formula based on need during 2005. A spokesman said the changes were not implemented because the Blair Government felt councils being overpaid needed time to adjust. SIGOMA is now saying ‘that period of adjustment is over'.

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WHITEHALL

Londoners losing out on £180m as ACA axe falls

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