Copyright yahoo
London will avoid the worst of Labour’s controversial council funding raid on wealthier areas amid claims that Angela Rayner’s plans to funnel more cash to northern cities have been dampened down, it was reported today. The former deputy prime minister and local government secretary had proposed to channel funding away from the capital and into more deprived areas of the country under a £2 billion town hall funding formula Kensington and Chelsea council told The Standard in July that tax would have to rise by more than 27 per cent to cover public services, from bin collections to social care, if the changes were implimented. There were also concerns that the amount Londoners pay to the Mayor of London to fund the Metropolitan Police will also be hiked. But the plans, which also prompted fears of London councils declaring bankruptcy, have reportedly been watered down following the departure of Ms Rayner from her Cabinet posts last month. She was replaced as local government secretary by Steve Reed, the former environment secretary. Sources involved in the negotiations told The Times that London authorities were “very pleased” with the changes, with “significant progress” made in how money would be allocated. Housing costs, which make up a small proportion of the overall deprivation “score” at present, will be a larger role in calculating how much money an authority receives. Since the cost of housing in London is significantly higher than the rest of the country, with the average property price-to-earnings ratio being about 1.5 times the UK average, this will make the capital appear more deprived and thus generate more funding. Other alterations include adjusting how the number of “daytime visitors” to an area are calculated, following concerns from London leaders that pandemic-era census figures were being used. The funding formula will also be updated for the latest financial year, a move which will highlight London councils’ need for investment because of the rise in spending on accommodation for asylum seekers. Based on Ms Rayner’s plans, the Institute for Fiscal Studies estimated that inner London councils would suffer cuts of 19 per cent, while the east Midlands would enjoy a 6 per cent funding increase. But a senior Labour MP in a northern seat said the allocation changes “could end up swinging all the money the other way”. They said: “London is a powerful force and they do their lobbying. “The audacity of it — I don’t see a pothole in Westminster, they’re more like paved with gold. I get it’s an election year but we faced 15 election years with s**t funding in the north, so unfortunately that’s the nature of the beast.” Sir Stephen Houghton, Labour leader of Barnsley council and chair of Sigoma, which represents 49 urban authorities outside London, added: “This would certainly not be good news. London has had very low council taxes but a very substantial amount in grants. I don’t want to see the hard work of previous ministers disappear.” A Government spokesman said they were “committed to fixing the outdated funding system we inherited, so that funding finally matches need”.
