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NORTHERN COUNCILS RECEIVE HOPE OF MORE FUNDING FROM PRESCOTT

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Local authorities in the north may be set to receive bigger budgets after environment secretary John Prescott said ...
Local authorities in the north may be set to receive bigger budgets after environment secretary John Prescott said he thought the present funding system was unfair, reports the Financial Times (p8).

Speaking to a meeting of Labour MPs yesterday, Mr Prescott said the government was almost ready to announce the standard spending assessments for local authorities for the next three years.

Northern Labour MPs have been lobbying the government to reduce the£1.5bn cost adjustment given to London boroughs and councils in the south-east to offset the higher cost of living in the south.

The MPs argue the north needs the extra resources to counteract the effect of the economic downturn which has seen the loss of many jobs, particularly in manufacuturing.

John Healey, secretary of the Sigoma group of MPs from metropolitan areas in the north and midlands, said: '...while we direct more public money towards high wage areas, we reinforce the strength of the local economy and encourage wage inflation, thereby widening the very costs gap that public money is applied to offset...'
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