Nottingham City Council deputy leader, Councillor Graham Chapman has welcomed news that the government has drawn back from extending the Transition Grant funding scheme for councils despite lobbying on behalf of County Councils.
However, despite this, according to Councillor Chapman, the government has still managed to “fix the system” by ensuring the extra money (£231million) announced in today’s financial settlement benefits County Councils the most.
Analysis of the finance settlement shows that, in distributing the funding, the Government has chosen the most favourable formula for county councils who will receive 37% of the additional funding. In contrast, unitary councils like Nottingham will receive 23%.
And while giving a muted welcome to the extra £1million Nottingham City Council will receive from this additional funding, Councillor Chapman has highlighted that this does not come close to meeting the additional £12million the council must find to care for elderly and disabled people in the year ahead.
According to Councillor Chapman, a number of the County Councils – including Northamptonshire County Council which is in financial crisis – are reaping the consequences of weakening their council tax base and extensive outsourcing of services leading to a fragile financial position. They are therefore being “rewarded for incompetence” in Councillor Chapman’s view.
This is despite unitary councils generally having their spending power cut more severely that county councils during the years of government reductions to council funding.
Councillor Chapman says: “The government has rightly drawn back from an extension of the Transition Grant, despite all the County Councils lobbying and I congratulate Sajid Javed for that. However, they have, deliberately in my view, used a method of distributing the money that benefits County Councils – many in wealthier areas – at the expense of poorer areas.
“County Councils claim that they are in particular difficulty. However, any analysis will tell you that counties have had fewer cuts in spending power than places like Nottingham, Manchester and Liverpool.
“It’s the decisions of the past few years like outsourcing services and freezing council tax that are causing severe financial difficulties now for a number of County Councils. It’s wrong for the Government to be rewarding these failures by fixing the system to channel extra funding them”