THE Chancellor of the Exchequer has been urged to consider the financial predicament of local authorities in the North-East, amid concerns that the region’s councils could lose chunks of their government grant in a funding shake-up.
After meeting with Sajid Javid, Darlington Borough Council leader Councillor Heather Scott said she remained unclear as to what the result of the government’s Fair Funding Review would be, but remained optimistic about the position of the authority, which has lost about £50m of government funding over the past decade and is facing rising adult social care costs.
Cllr Scott said there were “mixed messages” about what the deal might be and a Local Government Association study forecasting the impact of the Fair Funding Review had put over one point of view, which there was uncertainty over.
Cllr Scott, who was representing Tees Valley Mayor Ben Houchen at the meeting, said: “He gave lots of positive messages. We made the points about the fair funding deal and they said they will take that on board. It is always good to have face-to-face meetings to help with difficult decisions. We need more funding going in, but the chancellor has to take an overview.”
Cllr Scott’s discussions with the chancellor followed a meeting of the council that heard the authority stood to lose significant amounts of its grant if the association’s study was accurate. Darlington, the study stated, would lose £1.3m of its government funding or 4.9 per cent of its grant.
Meanwhile, according to the analysis, neighbouring Durham County Council would lose £10.3m or 6.7 per cent of its grant, Redcar and Cleveland Council would lose £2.5m, which is 6.4 per cent of its grant and Stockton Council £566,000, which is 1.2 per cent of its grant.
The Local Government Association said while Middlesbrough would be particularly badly hit, losing £6.7m or 15.7 per cent of its grant, North Yorkshire County Council would benefit with £13.5m more to spend, an uplift of 10.7 per cent.
Political commentators have said the new funding formula would put Boris Johnson’s pledge to “level up” resources between the south and the north under the spotlight.
Councillor Stephen Harker told the Darlington council meeting the predicted grants were “horribly inequitous” and would see southern local authorities benefit from the new formula while councils in the North-East would suffer. Cllr Scott told the meeting: “It appears, whether it is true or not, that the North is going to be disenfranchised again and we will lose out. It is very important that we all in this part of the world make our points known.”