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Northern leaders: Transition funding 'cannot' continue in current form

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Any extra funding for councils “cannot be distributed on the same basis” as it has been in the past two years should the controversial transition grant be retained, the 12 local authorities in the north-east have told Sajid Javid.

In a letter to the communities secretary, leaders said any additional funding “should be made available for all local authorities”.

LGC reported in September how the transition grant – which has been worth £150m in each of the last two years – could continue for the next two years of the current four-year finance settlement.

This is despite concerns about the way the money is distributed, with largely Conservative-controlled county councils taking the bulk of the funding despite metropolitan authorities taking the largest reduction in overall spending power.

Simon Henig (Lab), vice chair of the Association of North East Councils and Durham CC’s leader, said: “Local authorities in the north east are doing everything they can to balance budgets in extremely difficult circumstances and it is vital that if government are considering extending the transitional funding arrangements that they look at distributing this money more fairly.”

When the transition grant was announced in 2016-17, the first year of a the four-year settlement, the Department for Communities & Local Government said the money had been distributed to councils which had lost out due to a change in how cuts to revenue support grant were distributed from 2016-17 onwards.

LGC analysis found that in the first year of the grant more than 70% went to county councils. Metropolitan authorities received just 1.6%, or £2.5m, which was split between three councils, two of which were Tory-controlled Trafford and Solihull MBCs.

In their letter to Mr Javid, the 12 local authority leaders in the north-east said the DCLG’s rationale for compensating councils for changes to the methodology “cannot stand for any future allocations of such funding”.

“If additional funding is available to supplement the 2018-19 and future settlements, this cannot be distributed on the same basis as that which underpinned the transitional funding,” they wrote. “It should be made available for all local authorities given the acute pressures now being faced and distributed on a fair basis which is transparent and aligned to need.”

The 12 local authority leaders/elected mayors in the north-east:

  • Durham CC, Simon Henig (Lab)
  • Darlington BC, Bill Dixon (Lab)
  • Newcastle City Council, Nick Forbes (Lab)
  • Sunderland City Council, Harry Trueman (Lab)
  • Stockton BC, Bob Cook (Lab)
  • North Tyneside Council, mayor Norma Redfearn (Lab)
  • Middlesbrough Council, mayor Dave Budd (Lab)
  • Redcar & Cleveland BC, Sue Jeffrey (Lab)
  • Northumberland CC, Peter Jackson (Con)
  • South Tyneside Council, Iain Malcolm (Lab)
  • Gateshead Council, Martin Gannon (Lab)
  • Hartlepool BC, Christopher Akers-Belcher (Lab)
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Readers' comments (1)

  • It is pretty much a tradition that any major change to the distribution of funding comes with a damping mechanism. The unexpected change to the distribution to cuts to RSG etc. in 2016/17 initially didn't come with any damping, and Transition Grant was a hastily applied sticking plaster. County Councils took an unexpected kicking, partly because their council tax payers generally face higher bills than in London and the Mets, and transition grant applied the brakes to some extent. Perhaps County leaders should band together and put their case to DCLG - maybe they have already done so?

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