Poorest areas are hardest hit by cuts - heat maps

The poorest and most deprived parts of the country are the worst affected by Government cuts, according to new information published today.

Heat maps (link below) by Newcastle City Council show that the London borough of Hackney could suffer the biggest cut in Government funding per person by 2014/15 -£338. This is followed by Knowsley on Merseyside, Liverpool, Newham and Manchester. All five are also the most deprived places in the country according to the Index of Multiple Deprivation.

Newcastle City Council could suffer the 24th biggest cut - £218 per person by 2014/15 - out of 326 councils in England and Wales.

The council is currently consulting the public on £90m of cuts it has to make over the next three years. But another £10m of cuts taking the total to £100m may now have to be made following further cuts in Government funding announced in the autumn statement and the local government finance settlements for 2013/14 and provisional figures for 2014/15.

Leader of Newcastle City Council, Coun Nick Forbes, is now calling for the setting up of a new body jointly established by local and national government to oversee funding to local councils which he believes has become grossly unfair.

Coun Forbes said: "These heat maps provide conclusive proof that some councils are suffering much bigger cuts than others and this cannot be fair.

"The long established principle of councils being funded according to their levels of need to meet statutory requirements, which includes deprivation factors, seems to have been scrapped by the Government meaning that the poorest parts of the country are being hardest hit.

"It is not just Newcastle City Council that is saying this but other organisations such as the independent spending watchdog the Audit Commission and the Joseph Rowntree Foundation.

"I fear that Government is not listening to us and before this gets any worse - as it inevitably will - I am calling on the Government to set up an independent process in conjunction with local councils.

"Ministers would continue to set the overall amount for councils but how this would be distributed around the country would be taken out of the hands of politicians to create a system that is fair and most of all transparent.

"This would mean that Ministers would have to be clear and open about their intentions for funding councils, in place of the current system which is largely closed, highly complex and understood by only a handful of senior civil servants."

The Secretary of State for Communities and Local Government Eric Pickles compared Newcastle to Wokingham in the Commons saying Newcastle received £700 more than Wokingham in spending power per household.

But the city council's Director of Finance and Resources, Paul Woods, said there were clear and fully justifiable reasons why Newcastle's grant and spending power was higher - because its needs are much greater than Wokingham's, indeed our assessment is that the difference should be closer to £1,000 to meet the higher needs.

For example, £118 related to the new legal responsibilities around council tax support given to councils next year by Government; £105 of the difference relates to money for higher needs for early intervention for adult and children social care (Newcastle has four times as many looked after children per dwelling), and £316 relates to higher costs of adults' and older peoples' social care (Newcastle has many more poorer adults on low incomes whose care costs have to be funded by the council), and almost nine times the concessionary travel costs due to many more poorer pensioners who travel by bus.

To view the heat maps and data go to www.newcastle.gov.uk/budget2016

Heat maps show revenue spending power per council 2010/11 to 2014/15 and revenue spending power 2012/13 to 2014/15.  Figures for spending power changes in 2013/14 and provisional figures for 2014/15 are based on the spending power figures published on 19/20 December 2012 by DCLG.

It is likely that these figures understate the differences in spending power.  Heatmaps will be updated when DCLG publish corrected figures.

Heat maps were first produced by the Department for Communities and Local Government in May 2011 for 2011/12 to show an area per capita figure for Revenue Spending Power.

The city council then adapted the idea to show revenue spending power per head of population at an area level.

The purpose of Newcastle's maps is to highlight the impact of Government decisions around the country on a comparative basis, for example £ per head of population.

They show that whilst on the face of it percentage change might have been limited to 8.8 per cent, the impact in cash terms per head of population is substantially more significant for many deprived authorities.