A special Government fund which has seen Surrey County Council benefit the most and Nottingham get nothing has disturbing flaws, a National Audit Office (NAO) investigation has revealed.
The Government’s justifications for the way it allocated the Transition Funding Grant scheme – introduced last year to provide £300million of additional grant funding for councils over two years – are ‘wafer thin,’ according to Nottingham City Council Deputy Leader Graham Chapman.
With the Government set to announce the next round of Transition Funding, Councillor Chapman is raising questions about the probity and fairness of the initiative, which has mainly benefited councils serving well-off areas in the south – including Surrey which earlier this month became the subject of allegations around a ‘sweetheart’ funding deal with the Government. Surrey gained £12m through the scheme last year and is expected to gain a further £12m this year.
Under the Transitional Grant scheme, additional money was handed out, particularly to more affluent councils in the south of the country which over the austerity years have been subject to some of the lowest cuts. At the same time, those councils suffering severe cuts in more northerly places like Nottingham, Birmingham and Derby received no additional money. Outer London councils also benefited while those in Inner London did not.
The NAO investigation found that “…. the overall reductions in spending power experienced by authorities either in this or previous settlements were not involved in the design of the grant. The level of need or demand for local services was also not considered.”
The NAO was also unable to identify where the funding has come from saying “In the course of our investigation the Department has not given us further details on the source of the funds.”
Councillor Chapman has submitted a number of Freedom of Information requests to the DCLG over the past year about the underlying detail of Transition Funding but the Government has repeatedly refused to provide the requested information, saying it was not in the wider public interest. The issue has also been raised in Parliament through Parliamentary questions, again without success in receiving a satisfactory response from the Minister.
It is expected that the Government will announce the amount of Transition Fund money for each council for the forthcoming year as part of the Local Government Final Settlement on Wednesday 22 February.
Councillor Chapman said: “The findings of the National Audit Office investigation are worrying. The vast majority of the grant went to southern councils under Conservative control, with Surrey set to gain £24m on top of their sweetheart deal, while councils like Nottingham, Birmingham and Derby get nothing. Now it seems, as we believed from the start, that this was not done on a fair and equitable basis and failed to take important factors like need into account. The NAO investigation reveals that the justification for the way the cash was distributed is wafer thin.
“As if that’s not bad enough, it seems the Government is about to repeat the process, meaning a double blow for places that have already borne the brunt of Government cuts in their grant funding over the last six years. That’s why I’m calling on the Government to provide all councils in need with a similar funding package and not just those who happen to be of the same political persuasion as the Minister for Communities and Local Government.”