The Government would be rewarding incompetence by bringing back the widely-criticised and unfair Transition Grant scheme to “bail out” failing County Councils, says Nottingham’s deputy leader.

Two years ago, the Transition Grant scheme was used to hand out an extra £300million in funding – particularly to more affluent councils in the south of the country who, over the austerity years have escaped serious funding cuts.

At the same time, more northerly places like Nottingham, Derby and Leicester which have borne the brunt of severe funding cuts from Government received no additional money. Despite repeated Freedom of Information requests from Councillor Graham Chapman, the Government is still refusing to give detailed information about how decisions to distribute Transition Grant funding were made.

Councillor Chapman’s intervention comes following news that the Government has delayed the announcement of the Financial Settlement for councils until tomorrow (6th February) in a move believed to be motivated by lobbying from County Councils for extra funding.

This follows the revelation last week that Northamptonshire County Council became the first council in recent times to be served with a notice banning all new expenditure, with the exception of statutory services for protecting vulnerable people. A number of other County Councils are believed to be close to following in Northamptonshire’s footsteps.

Government figures show that Nottingham has been hit more than twice as hard as Northamptonshire when it comes to Spending Power reductions since 2013. However, unlike Northamptonshire, Nottingham City Council has not outsourced its services, frozen Council Tax or sold off assets during that period.

Councillor Chapman said: “In light of the financial crisis at Northamptonshire County Council, I’m concerned that the Government is panicking and will use this as a way to resurrect the unfair Transition Grant scheme. This is why they have delayed the announcement of the Financial Settlement.

“The crisis at Northamptonshire County Council shows the dangers of extensive outsourcing of services, freezing council tax and selling off assets – things we have avoided doing in Nottingham.

“It would be grossly unfair to reward incompetence by bringing back the discredited and unfair Transition Grant scheme, which favoured better-off places in the South of the country.”