The Mayor of Tower Hamlets has written to the Prime Minister urging her to rethink the so-called ‘Fair Funding’ review which could see millions in council funding diverted away from disadvantaged areas like Tower Hamlets to more affluent shire areas.
The ‘Fair Funding’ review, which will change the way local councils are funded, is planned to be introduced from 2020/21. An official consultation on the review ran from December 2018 to February 2019, with a response from the government expected soon.
The letter to Prime Minister highlights that government plans ‘propose a reduced focus on deprivation and population growth, both of which would have a major impact on Tower Hamlets.’
Recent analysis from the Local Government Chronicle (LGC) has found that more than half a billion pounds is likely to be diverted from London boroughs, mainly to shire areas.
The letter also highlights that the dwindling resources available to councils are increasingly being used to ‘plug the gaps’ left by cuts to other areas, for example Tower Hamlets Council spends millions of pounds to provide additional police officers and a hospital link-worker to tackle knife crime.
Tower Hamlets’ core funding from government is £148m or 64% less compared with 2010.
Highlighting the pressures on local government more widely, brand new figures from PricewaterhouseCoopers reveal that county councils may face ‘a funding black hole of over £50bn over the next six years’ and that councils may be forced to make ‘draconian cuts to local services’ and provide only ‘a basic, bare minimum core offer to residents.’
Mayor of Tower Hamlets John Biggs said: “Despite nearly a decade of cuts, we’ve been able to keep all our libraries, Idea Stores, leisure centres and children’s centres open. But there is real concern about what will happen to frontline services if the Fair Funding Review strips even more money out of boroughs like ours. Make no mistake, the choices are getting tougher.
“The Prime Minister can claim austerity is over, but by redistributing money out of boroughs like Tower Hamlets to wealthier shire areas it’s clear the truth is very different.”
Councillor Candida Ronald, Cabinet Member for Resources, said: “It would be an enormous mistake for the government to fail to take deprivation into account when deciding council funding. Areas like Tower Hamlets with high levels of deprivation will suffer when we’ve already seen significant cuts to our budgets. The government’s ongoing welfare reforms on top of continued cuts to council budgets are leading to dangerous impacts for the most vulnerable in our society.”