Oldham Civic Centre
Oldham Civic Centre

Figures released by the Conservative controlled Local Government Association (LGA) show that Oldham Council is set to lose nearly £5.35 million from 2021, under a reallocation of funding to local authorities.

This follows a “fair funding review” set up by the Government last year.

The LGA’s analysis looks at the effect of the government’s proposed “fair funding” formula and the potential effect on local councils’ adult social care budgets across the country.

The analysis shows that £320 million a year could be taken away from the most deprived areas, mainly in the north of England, and £300 million redirected to affluent areas, mainly in the South East.

In reaction to the news Oldham East and Saddleworth MP, Debbie Abrahams, said:

“This looks familiar. Another example of the Tories’ policies, taking from the poor to give to the rich.
“Boris Johnson had promised to level up the resources required by each region across the country so it will be interesting to see what he does to tackle this blatant money-grab to fund areas mainly served by Tory MPs.
“Having said that, the decision to change the funding formula could have backfired on them spectacularly now that 35 of the new Tory MPs, in former Labour heartlands, are now finding out what it’s like to be on the receiving end of their own Tory cuts.
“These new Tory MPs know these changes to the funding allocations are unfair so it will be interesting to see if they keep silent, and put their own jobs first, or speak up for their local communities.”

Oldham Council leader Sean Fielding said:

“In Oldham we’ve seen a decade of cuts. We’ve lost over £200 million from our council budget since 2010.
“Over £200 million taken from libraries, youth centres and care for older residents. Over £200m that can’t fill pot holes, or provide training to get people into better jobs.
“The ‘Fair Funding Review’ was a much needed opportunity to start correcting the mistakes of austerity, but instead it looks like more of the same.
“Taking more from places like Oldham to boost the coffers of southern shires would demonstrate once and for all that the Tories don’t understand the need we have for quality public services. Maybe they just don’t care.”

Jim McMahon, MP for Oldham West and Royton, and Shadow Minister for Local Government and Devolution, said:

“The promise to invest in the north and our towns was always a lie.
“Now the evidence is stark as the government release its ‘Fair Funding Review.’ Just like the Living Wage, the local government funding review is far from fair.
“We always knew the government would keep coming back to take money from councils like Oldham, and we’ve seen the impact of those cuts to vital services right here. Even I’m surprised at the brazen way money is being snatched from the most deprived communities to fund a cash boost for wealthy Tory shires.
“Across England, £300 million will be moved from the poorest areas to the wealthiest. Our town has already faced eye watering cuts of £200 million and demand for services like children’s services and adult social care have increased significantly. The impact is felt with cuts to neighbourhood services most.
“It will mean that Oldham will lose a further £5.3 million-plus, in addition to planned cuts of £3 million this year. The biggest additional cut will be levelled at Birmingham, losing £48 million. Meanwhile the winners are the Tory strongholds of Hampshire which will be handed an extra £35 million , and Surrey benefiting by a further £23 million. I hope that councils come together and launch a legal challenge against this move.”

Ashton MP, Angela Rayner, said:

“This is one of Boris Johnson’s first chances to come good on his vow to ‘level up’ resources between the north and south and it’s looking like he’ll fail to stick to his word.
“What a surprise. Oldham Council is set to lose £5.3 million and Tameside Council £5.6 million while places like Hampshire and Surrey are in line for a huge boost.
“It’s not fair and the north deserves so much better. Councils in my part of the country have endured cut after cut, forcing them to slash vital services to the bone. It’ll be fascinating to see who the new Tory MPs, who won seats in northern Labour heartlands, decide to put first; their jobs or their constituents.”

The government proposed that the funding should be allocated purely on the basis of population. This means that the formula measures “need” for public transport, housing and homelessness, cultural, environmental services, waste, planning and regulatory services solely by the number of people living in an authority’s area – but, crucially, taking no account of deprivation which drives demand for services.

The government’s proposals assume that every council is able to collect council tax from their residents at the same rate, despite the clear and established link between deprivation and an area’s ability to collect it.

The Institute for Fiscal Studies has criticised the Government’s approach stating: “The rationale for basing the Foundation Formula on population only is weak: the statistical results cited by the Ministry of Housing, Communities and Local Government are not strong enough to support such a decision.”

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