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Funding public health by business rates a ‘double-edged sword’

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Confirmation that the public health grant will be funded through retained business rates could be a “double edged sword”, the chief executive of the Association of Directors of Public Health has said.

The provisional local government finance settlement on Tuesday said councils will be allowed to keep business rates to the value of the public health, revenue support, rural services and Greater London Authority transport grants from 2020-21.

This represents business rates retention of at least 75%, based on the value of the grants in 2019-20, and the government has said a set of measures will now be developed to support a “smooth transition” from the public health funding grant.

ADPH chief executive Nicola Close told LGC she is not against the principle of public health being funded through business rates, but warned poorer areas with higher health inequalities will generate less revenue and this will need to be addressed through the fair funding review.

She said: “It is a double-edged sword. It is good to be treated the same as most of what local authorities do rather than being an add-on but there are implications, particularly around health inequalities.

“It all depends on what sort of redistribution there might be. Normally when you fund any health services is to give more money to poorer areas. The devil will be in the detail.”

Ms Close also said the new funding arrangement could also create an opportunity for health to be “important across the whole local authority spend”.

She added that ADPH was in discussions with Public Health England, the Department of Health and the Department of Communities and Local Government on the implementation of the new funding arrangements.

In a letter published today, Public Health England chief executive Duncan Selbie said the public health grant will only be replaced by retained business rates on the understanding that “assurance arrangements” have been established that will replace his role as accounting officer to parliament. 

He added: ”We are therefore working with the DH to agree the assurance arrangements that will need to be in place before the grant comes to an end and expect to confirm those measures by spring 2019.

“Should this not be possible, the government may wish to consider retaining the ring-fenced grant beyond 2020.”

Figures published today show the total public health grant for 2018-19 is £3.21bn, down from £3.30bn this year - a reduction of 2.6%. The indicative total for the grant in 2019-20 is 3.13bn - also a 2.6% reduction.

These decreases are part of planned cuts to public health funding of at least £600m by 2020-21, on top of a £200m reduction in the 2015-16 budget.

Responding to the announcement, chair of the Local Government Association’s community wellbeing board Izzi Seccombe (Con) said reducing public health funding is “extremely counterproductive” and would undermine efforts to keep pressure off the NHS and adult social care services.

She added: ““Further reductions to the public health budget reinforces the view that central government sees prevention services as nice-to-do but ultimately non-essential. Interventions to tackle teenage pregnancy, child obesity, physical inactivity, sexually transmitted infections and substance misuse cannot be seen as an added extra for health budgets.

“Local authorities were eager to pick up the mantle of public health in 2013 but many will now feel that they have been handed all of the responsibility but without the appropriate resources to do so.”

 Cllr Seccombe added the LGA is seeking reassurance from the government that councils will be given a “free hand” to identify savings in public health budgets.

This story was updated on 22 December to include the response from Cllr Seccombe

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