The top 10% of England’s most deprived local authorities have seen government cuts almost three times as high as the richest 10% of councils, according to new research.
Analysis by the Specialist Interest Group of Municipal Authorities (SIGOMA) has revealed that, on average, the top 10% of the poorest councils in England have received a 28.3% funding cut between 2010/11 and 2023/24.
However, the research found that the richest 10% of councils have received a 10.1% cut, on average, during the same period.
SIGOMA also found government funding represented over 55% of councils’ core spending power in 2013/14, but represented 37% in 2023/24. At the same time, the percentage of council funding from local revenue, such as council tax and business rates, has increased.
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Stephen Houghton, SIGOMA’s chair, said: “Failure to reset business rates growth has unfairly disadvantaged the poorest councils over the last three years.
“The system needs serious reform. Reversing the trends will not happen overnight and we need to introduce a new model that reforms local government finance to create a fairer funding system.”
According to the research, in 2013/14 the government paid £4.9bn more in grants than councils handed over in business rates. However, by 2023, the overall fall in funding means councils are set to receive £4.5bn less than will be raised from business rates – a reversal of £9.4bn.
“The poorest areas have seen the biggest cuts and for ‘levelling up’ to mean anything the government should be looking to reverse these cuts and create a funding formula of funding according to council needs,” Houghton added.
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