Imminent cuts to town hall budgets will fall much harder on the most deprived councils in England than those in prosperous leafy areas, according to research into this week’s cuts.
The Labour-controlled authorities representing the 10 most deprived areas in the country, which include Tower Hamlets, Blackpool, Manchester and Hackney, will be hit with a 7 per cent fall in their spending power in the next financial year.
By contrast, the 10 most well-off areas are to see a fall in income of just 1.8 per cent, according to the research by Labour. Eight of these authorities, which include Surrey Heath, Harborough and Rushcliffe, are controlled by the Conservatives.
Hilary Benn, shadow communities secretary, said: “This new information shows just how the Tory-led government has targeted cuts in a way that doesn’t reflect the resources the most deprived communities need.”
The government retaliated by arguing that Labour would have had to make similar cuts if it were in power.
One Tory aide pointed out that average council spending in Newcastle was still £2,523, against just £1,814 in Wokingham.
However, those two areas do illustrate the way that, in relative terms, the cuts will fall harder on the north. Newcastle is set for a 6.8 per cent decline in spending power against Wokingham’s 3.2 per cent.
The complex formula for local government financing includes a cap whereby no council would see a cut of more than 8.8 per cent for 2013-14.
The key to the variations includes the fact that some councils are much more reliant on central government’s “formula grant” than other, more prosperous ones which receive higher income from other sources such as business rates.
The coalition’s “New Homes Bonus” has also rewarded those councils where new properties have been built and punished those with no property development.
Seven of England’s biggest cities have written to Mr Pickles to warn about a “looming financial crisis”.