Tuesday 5 March 2019 / 6:21 PM Andrew Gwynne / Local Government

Towns Fund: More questions to answer

Labour writes to the Secretary of State seeking responses to the unanswered questions surrounding the Tories Stronger Towns Fund announcement.

Following the Tories announcement, there remain a series of unanswered questions that James Brokenshire, Communities Secretary, has failed to clarify.

Andrew Gwynne, Labour’s Shadow Secretary of State for Communities and Local Government, writes today to clarity:

  • Why will this funding still leave councils with a £5.7bn shortfall in funding?
  • Why is deprivation included for consideration for this Fund but not as part of the Tories fair funding review?
  • Why is the Government not fully matching lost EU funding?
  • Why is there no clarity over where the money will go and on what?
  • How much of this money is already allocated funding, and if none of it, how is the Government raising revenue for the Fund?

 

 

Notes to editors

 

Full text of letter:

 

Dear Secretary of State,

5 March 2018

On Tuesday, you announced the new £1.6 billion Stronger Towns Fund. Following your statement to the House there remains a number of unanswered questions.

Compared to the cuts that your government has inflicted on local councils across the country,  this new funding announcement is a drop in the ocean.  Councils will see a drop of £7.3bn in spending this decade as a result of nine years of austerity under the Tories.  So even being favourable to Ministers – and ignoring all the other cuts the Tories have inflicted on communities – the Government’s enticement is £5.7bn short of the cuts they have inflicted on our local councils.

Take the North West for example, this announcement is still £1.185bn short of the damage austerity has caused to local communities. So why are you failing to give councils the funding they need?

You’ve said that you’re taking the deprivation rating of each area into account when deciding the allocation of this fund. Yet you’re changing the way that the local government settlement will be calculated going forward to take deprivation considerations out. Therefore aiding more affluent, typically Tory voting areas. Why then, is deprivation, rightly, included as consideration for this fund, but, wrongly, not as part the fair funding formula review?

In your statement you also failed to acknowledge, that the funding promised over the next seven years does not even get close to matching the amount regions have received from the EU over the last seven years in the European Regional Development and Social Funding. This package is £642m a year short of the money that these same English regions would have received on average over the next seven years. During and after the referendum we were told that no area would be worse off. Now with these announcement we see they will. Why will you not match the EU’s funding?

There remains a number of other unanswered questions. Why is £600m of the fund unallocated? And why is there no clarity over where the money will go and on what? Or any clarity where the Fund’s money was coming from. Can you confirm how much of this money is already allocated funding, and if not, how is the Government raising revenue for the Fund?

There is also an underlining lack of clarity regarding the allocations for Scotland, Wales and Northern Ireland. Will the fund be managed by MHCLG as a UK-wide initiative? Will the respective allocations be allocated to the Scotland, Wales and NI Offices to administer as part of a UK-wide initiative; or will the English allocation be ‘Barnetised’ and the respective sums be allocated to the Devolved administrations as part of their block grants? Also what is the timescale for these decisions to be made and communicated to the House?

To conclude, I need not remind you that under the Conservatives there have been unprecedented levels of cuts to local government. Since 2010 councils will have lost 60p out of every £1 the last Labour Government had provided for local services. The most deprived areas of the country have been hit much harder than the richest areas – nine of the ten most deprived councils in the country have seen cuts of almost three times the national average.

At an absolute minimum, you must immediately cancel the planned further cut of £1.3 billion to next year’s Revenue Support Grant. To blindly press on with further cuts at a time when local government is on the brink of collapse would be hugely irresponsible.

If you will not act then you should stand aside and let a Labour government build a society for the many, not the few.

Given the public interest in this matter we will be publishing this letter.

Yours sincerely,

Andrew Gwynne MP, Shadow Secretary of State for Communities and Local Government