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England's most deprived communities will be hit hardest by this week's local spending cuts –described as the deepest since the Second World War – despite ministers' late move to ease the pain of front-loading. As the dust settled on Monday's two-year local government finance settlement, the emerging picture of hefty cuts across some of England's most deprived areas made for grim reading. The Local Government Association published analysis which suggested councils now faced a ‘total funding shortfall of £6.5bn in the next two years' – and called for new finance-raising powers to help town halls. More on the Local Government Settlement View each council's individual settlement here LGiU: Funding Settlement Reductions Local Government Group Briefing NLGN director, Simon Parker, said: ‘This is a hugely-challenging settlement for local government, and especially so for deprived parts of the country. Councils such as Newham and Liverpool, with some of the nation's poorest wards, face cuts of more than 15% in their spending power over the next two years, while some far wealthier areas take less than 5%.' Cllr Joe Anderson, leader of Liverpool City Council confirmed his authority would be £100m ‘worse off' over the next two years, and faced ‘the biggest cuts in its services since 1945'. Liverpool's cabinet member for finance, Cllr Paul Brant, warned the cuts ‘will mean hundreds of job losses, and every service will be affected'. As The MJ revealed last month, communities secretary, Eric Pickles, delivered an early Christmas present by allocating £85m of unspent CLG cash to authorities facing the most severe front-loaded cuts in spending during 2011/12. Through this ‘transitional fund' – officially established to ease councils through the withdrawal of the Working Neighbourhoods Fund – Mr Pickles said he had ensured no council faced a cut to its ‘total spending power' of more than 8.9% in 2011/12, while the average cut would be 4.4%. In total, 37 councils were spared deeper cuts by Mr Pickles' cap, which followed heavy criticism of the front-loading revealed in the Spending Review by the Local Government Association, London Councils and the County Councils Network. But in focusing on ‘total spending power' within the settlement, Mr Pickles confirmed he included in his figures all grants to councils, as well as predicted council tax revenues and the £1bn of NHS social care cash handed to local government this autumn. The CLG acknowledged the average reduction to councils' formula grant in 2011/12 was 9.9%, while the LGA calculated it was 12.1%, once police grants were removed. The CLG also confirmed the pre-transition fund settlement for councils this year would be used as the baseline calculation for 2012/13 – leaving the spectre of deep cuts to come. Jules Pipe, mayor of Hackney LBC and London Councils chair, said the capital's boroughs now faced average formula grant cuts of more than 11%. ‘London Councils called for the front-loading of these cuts to be eased. The Government has taken a step in this direction, but front-loading remains at the heart of the settlement – the cut in April 2011 is almost 50% higher than in year two. London's councils are already planning for improved efficiency, shared services and new approaches to service delivery. The scale of these reductions is so large that no combination of these is sufficient to protect the services that Londoners expect,' he warned. Sir Robin Wales, mayor of Newham LBC, warned the ‘savage cuts' would ‘jeopardise' the post-2012 Olympic legacy within the borough. But tough settlements are not limited to deprived urban communities or Labour-led authorities. The County Councils Network (CCN), dominated by Conservative counties, warned counties would struggle, despite Mr Pickles' reprieve on front-loading. ‘Despite the excitable headlines, no CCN member loses less than 10.3% of their formula grant after "damping", and some lose up to 14.3%,' one CCN analysis stated. A CLG spokesman said: ‘The secretary of state has focused on total spending power. ‘Formula grant represents around one-quarter of total council spending. This settlement limits the reduction in total spending power at any council to 8.9% next year, with measures taken to protect the most vulnerable communities.'

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WHITEHALL

Sweetener fails to offset taste of cuts

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