The controversial £300m transition grant could continue for the next two years of the current four-year finance settlement, Department for Communities & Local Government officials have said.
The news emerged in the latest development of a long-running Freedom of Information battle between the department and Nottingham City Council’s deputy leader Graham Chapman (Lab).
Cllr Chapman has been seeking details of how distribution of the grant, worth £150m in 2016-17 and 2017-18, was determined.
LGC analysis has previously found that in the first year of the grant more than 70% was due to go to county councils. Metropolitan authorities were set to receive just 1.6%, or £2.5m, split between three councils, of whom Trafford and Solihull MBCs are the only metropolitan Conservative administrations.
Officials had previously declined to reveal details during the two financial years in question on the grounds that the formula related to the formulation of government policy and at the time the transition grant for 2017-18 had yet to be approved by Parliament.
That approval has now happened, however in the DCLG’s latest response to Cllr Chapman, seen by LGC, officials say they expect ministers will need to consider the issue of a transition grant again in the final two years of the four year settlement and so the policy remains “under development”.
The response states: “In 2016-17, ministers consulted and decided to provide the transition grant in 2016-17 and 2017-18. We expect that ministers will need to consider this issue again in consulting on the 2018-19 and 2019-20 settlements, not least because we know that many authorities have called for the transition grant to be extended to these years.”
When the grant was announced in 2016-17, the first year of a the four-year settlement, the DCLG said it 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.
Unlike in previous years, a council’s total income from revenue support grant, council tax and business rates was considered before the cut was applied. This meant metropolitan authorities saw a smaller cut than they would have done under the old methodology, but they still saw the largest reduction in overall spending power.
Cllr Chapman said: “It beggars belief that the government seem set on repeating a process that gave millions of pounds to wealthier parts of the country at the expense of places in the Midlands and the north which have been hit harder by the effects of austerity.
“Despite numerous Freedom of Information requests, we are still being blocked from knowing key details about how this transition grant funding was worked out and allocated.”