Lancashire County Council could "look again" at cuts if it was funded more fairly, leader says

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Lancashire would be in line for an extra £250m of government cash per year – if ministers were to respond to a call from dozens of local authorities for fairer funding.

More than 30 county council leaders have signed an open letter urging the Prime Minister Boris Johnson to bridge a £3.2bn gap between average per-person funding in so-called “shire areas” and other parts of the country.

Lancashire County Council leader Geoff Driver is amongst more than 30 signatories of an open letter to government calling for fairer funding

Lancashire County Council leader Geoff Driver is amongst more than 30 signatories of an open letter to government calling for fairer funding

READ MORE >>> Should council funding depend on how deprived an area is?

Lancashire County Council leader Geoff Driver, who is amongst the signatories, said that such an overhaul could allow the authority to revisit some of the savings which it has to make during a decade of austerity.

“It would mean that we could do some significant things for the people of Lancashire,” County Coun Driver said.

“I make no secret of the fact that we are having to make some reductions that we’d rather not be making, because we have had to cut our suit according to our cloth. If we were given an extra £250m, we would be able to look again at some of [those] reductions.”

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The authority has seen around £600m shaved from its budget since 2010 – and has had to make over £150m of savings in just the last two years. A general government grant for local authorities has been phased out, with County Hall being one of the last to see it go in 2020.

But it is claimed that county councils have been particularly hard hit by the changes, because of existing funding unfairness between different types of authority.

The letter, from members of the County Councils Network, says that counties receive an average of £240 per person in government funding, compared to £419 in metropolitan areas and £601 in inner London - both of which are controlled by standalone councils, rather than having two-tier authorities like county areas.

It also reveals that the average Band D council tax bill in county areas is more than double that in some parts of the capital. Lancashire County Council’s share of council tax increased by the maximum permitted amount in each of the last two years.

The leaders have called for a “cash injection” for counties next year to tide them over after a long-promised government review into fairer funding for councils was delayed by Brexit.

But County Cllr Driver denies the call represents the “begging bowl” mentality which he has often decried in opposition parties when they have demanded more cash from ministers.

“It’s not [a case of] saying ‘give us more’, like Oliver Twist. It’s saying to the government that they promised a fair funding review this year, it’s now not going to [be implemented] for three years, so they need to be looking at some emergency measures to cover that fact,” the Conservative leader said.

The letter calls on the Prime Minister to address the “historic underfunding of England’s heartlands” – and also demands a “bigger finding pot” for all types of council.

Labour opposition group leader Azhar Ali - a member of the executive board of the County Councils Network - said he supports the sentiment of the letter, but is not hopeful that the call within it will be heeded.

"Lancashire has been totally screwed by the Conservative government, which has taken away more than half a billion pounds which supported our deprived communities and rural areas.

"It's all well and good saying that we could stop making cuts if we got this extra money, but central government has strangled local government over the last nine years and I don't see any prospect of that changing.

"You can tell that we are getting towards a possible general election with all these promises the government are making. But the only way Lancashire can move forward is if it's given back the £600m which has been taken away from it - that's how you level up the playing field," County Cllr Ali added.

Meanwhile, the so-called "comprehensive spending review" of the medium-term finances of all government departments - including the one which deals with local authorities - has been downgraded from a three-year assessment to one spanning only twelve months.

However, County Cllr Driver said that he remains “optimistic” for the future of local government.

“[Lancashire County Council] had a deficit of £200m which we have got down to £47m – that’s £47m too much, but we are working on it to ensure that we can make the services for the people of Lancashire viable for the future.”

IN NUMBERS

£764m - Lancashire County Council's budget in 2018/19

£920m - what Lancashire County Council's budget would have been in 2018/19 if it had kept pace with inflation

£600m - approximate value of central government support withdrawn from Lancashire County Council since 2010

£250m - extra cash which Lancashire County Council would receive if all counties received the average per-person funding across local government

£47m - Lancashire County Council's remaining deficit by 2022/23

LEADERS' LETTER IN FULL

The Prime Minister’s commitment to ‘levelling up’ government investment in all parts of the country is a message that we strongly welcome as leaders of England’s county local authorities.

For decades, the towns, rural, and coastal communities that make up our historic shire counties - and which contain 25 million people - have been left behind our major cities and urban areas. This is especially true for local government funding.

This year, county authorities will receive just £240 for each resident from core central government grants, compared to £414 in the capital and £449 in other urban areas – with central London boroughs receiving £601 per person.

Historic underfunding of England’s heartlands has contributed to the perverse situation where some London boroughs are still able to charge residents council tax at half the average paid in shire counties, while leaving county councils facing a funding black hole of £11.2bn over the next five years; nine times greater than councils in the capital.

The County Councils Network, supported by MPs from counties, have campaigned tirelessly to redress these funding inequalities and for a bigger funding pot for all local authorities.

Under the stewardship of Rishi Sunak – now Chief Secretary to Treasury – good progress was made on the ‘fair funding review’. There was hope that under the proposals he developed that there would be a genuine levelling up of the funding received for county residents. But the changing of the guard in Westminster has cast doubt over this.

If the Prime Minister is to fulfil his pledge to truly level up opportunity in this country, then we must have a cast iron commitment to fair and sustainable funding for underfunded and overburdened councils.

Boris Johnson knows from his time as London Mayor how the capital benefited from more generous funding; enabling him to invest its infrastructure and local services, while also freezing, and even cutting, council tax.

It is time our shire counties were given the same opportunities.

THE GOVERNMENT'S RESPONSE

Following publication of the county council leaders' letter, a spokesperson for the Ministry of Housing Communities and Local Government said:

“The Prime Minister has set out his vision for levelling up our country by giving local leaders greater powers, and this year alone we’ve given local authorities access to £46.4 billion.”

Local authorities are due to be advised of their finance settlements from central government in December.

SHOULD COUNCIL FUNDING DEPEND ON HOW DEPRIVED AN AREA IS?

As part of its consultation into devising a fairer funding settlement for local authorities, the government has asked for councils' opinions on reducing the weight attached to deprivation when calculating how much cash they should receive.

Unlike the County Councils Network - which believes its members are disadvantaged by the measurement compared to more urban areas - Geoff Driver has described the potential downgrading of deprivation in the funding formula as "shameful".

“It’s one of the most significant factors in determining how much a council needs to spend - and it concerns me greatly if government is moving away from those basic principles of how they give local authorities financial support," he said earlier this year.

"Local authorities have different needs and have different resources available to meet those needs.

“They’ve got different age profiles, different needs in schools and different areas of deprivation which all inevitably have an impact - Lancashire has some of the most deprived wards in the country."

As part of the government's consultation, it proposed basing 20 percent of the money given to councils purely on population numbers. But the remainder - which includes adult and children's social care and public health - would still be decided only after the deprivation in an area had been factored in.

WHO'S BETTER AT BALANCING THE BOOKS?

Power at County Hall has alternated between the Conservative and Labour groups since austerity began to bite into the council's budget back in 2010.

Agreement between the two main political groups on the best way forward has been rare - but both have had to make swingeing cuts running into the hundreds of millions of pounds after a decade of government cuts to council funding.

Back in 2016, when Labour was in control, the party came in for fierce criticism from the then Conservative opposition for closing more than two dozen libraries and reducing subsidies for bus services - both of which became an election issue the following year, with libraries reopened after the change of administration.

Just this year, Labour attempted to "call-in" a Conservative decision to cut more than £4m from the county's public health budget, which will see services for people with low-level social problems and healthy lives programmes scaled back. The opposition attempt to force a rethink failed.

At a cabinet meeting earlier this month, deputy Labour group leader John Fillis said that his party had dealt with £400m of the £600m removed from Lancashire County Council's coffers over the past decade.

"The Conservative administration is now whinging and whining that we left you £200m to finish off. But I think it's clear that we were the ones who had to take the biggest hit and dealt with the most problems," County Cllr Fillis said.

But Conservative council leader Geoff Driver said his group "worked in the real world, not the world as we would like it to be".

"You allowed problems to build up for the next administration to resolve," he said.