Hackney Mayor Philip Glanville has hit out at central government for what he characterises as an ‘Orwellian stitch-up’ over how funding for the borough could be decided in the future.
The government’s Fair Funding Review was expected to use the three main “cost drivers” of population, deprivation and sparsity in judging who receives what, alongside those unique to specific local authorities, according to House of Commons Library research released last year.
However, the government is currently considering removing factors including deprivation measures and homelessness levels from the decision-making formula on how Town Halls are funded, which council officers fear could siphon off funds from urban areas.
Referring to the Fair Funding Review, Glanville said: “If you continue the controls on public spending which the government impose, local government sees further reductions in their funding over the next period going into the spending review, so the ‘funding’ element is Orwellian.
“The ‘fair’ bit, the stitch-up element, is what happens to the formula. They’re proposing to remove deprivation and insert sparsity and rurality as terms within the funding formula.
“The fair funding formula is a continuation of austerity for local government, and if the cake is further skewed again against places like Hackney, then we’ll see further austerity into the next decade.”
Hackney Council officers also voiced concern that there were currently no transitional arrangements in place for councils who could see a large chunk of their resources taken away when the final settlement comes out before Christmas.
It is not yet known what impact the Fair Funding Review could have on the council’s £30m budget gap between now and 2022/23.
An MHCLG spokesperson said:
“Councils, not central government, are responsible for managing their own resources.
“We are providing £91.5 billion to help councils meet their residents’ needs.
“The government has recently consulted on a new funding formula. This is a complex piece of work and we want to get it right.”
Note: This article was updated at 21:12 on 22/02/19 with a response from the Ministry of Housing, Communities and Local Government.