An opportunity to support levelling up through council budgets was missed for another 12 months just before Christmas when the government announced the local government funding package for 2022-23.
Councils in England will receive £53.9bn, an increase of £3.5bn, described by the Department for Levelling up, Housing and Communities (DLUHC) as ‘largest cash-terms increase in grant funding for 10 years’.
While the DLUHC says that the package will ‘support councils to play a significant role in the government’s transformative levelling up agenda as the country builds back better from the pandemic’, there is no indication that it will include any special help for economically lagging areas like the North East.
Any redistribution of funding between local authorities based on their needs and resources is at least 12 months away, after the DLUHC said: ‘The government is committed to ensuring that funding allocations for councils are based on an up-to-date assessment of their needs and resources. The data used to assess this has not been updated in a number of years…
‘Over the coming months, DLUHC will work closely with the sector and other stakeholders to update this and to look at the challenges and opportunities facing the sector before consulting on any potential changes’.
Councillors in the North East and elsewhere have been waiting since 2016 of the outcome of a Fair Funding Review designed to ensure money goes where it is most needed. The delay could be due to the fact that the review is likely to be politically inconvenient for the government: according to the Local Government Chronicle, small towns in the Midlands and the north could be the biggest winners while some counties and London boroughs are concerned they could lose out.
Councillor James Jamieson, Conservative chairman of the Local Government Association and leader of Central Bedfordshire Council, commenting on the announcement, said:
“The increase in grant together with council tax raising powers…will support councils to meet extra cost and demand-led pressures next year to keep providing services at pre-pandemic levels. However, for that to happen every council will have to raise council tax by the maximum next year’.
He added: ‘Following [the] provisional settlement, the government should now provide clarity on which local government funding reforms will happen and when. It needs to push ahead with the Fair Funding Review, including looking both at the data and the formulas used to distribute funding’.
Given that no new money for levelling up on top of what has already been announced now seems likely for at least a year, the Fair Funding Review and the updated assessment of councils’ needs and resources seem the only vehicles for funding levelling up even on the horizon. They should be progressed as fast as possible.