Fair Funding Review in for ‘robust criticism’ with London set to lose out

Cllr Andy Hull (second from left) at policy & performance scrutiny committee, 14 February. Photograph: Ed Sheridan.

Islington council officers are gearing up to “robustly criticise” the government’s grant funding plans for 2020 onwards.

The Fair Funding Review, currently out for consultation with councils, was expected to use the three main “cost drivers” of population, deprivation and sparsity in judging who receives what, alongside those unique to specific local authorities, according to House of Commons Library research released last year.

Concerns were raised by councillors at a 14 February meeting of the Town Hall’s policy and performance scrutiny committee that the new funding arrangements could see London lose out at the expense of more rural local authorities.

Alan Layton, service director for financial and asset management at Islington council, said: “There’s a consultation out for return on 21 February. We’re allying ourselves with the position of London Councils’ co-ordinated London response.

“Effectively, they’re taking out ‘deprivation’ as a factor, which is clearly a benefit to London, and including in one of the other factors – ‘remoteness’.

“So it’s very clear what they’re trying to achieve, and we’ll respond robustly with criticism along with London Councils.”

Cllr Andy Hull (Lab, Highbury West), executive member for finance, performance and community safety, added: “It’s a fact that the government under its so-called fair funding review is looking to shift money from places like Islington to leafier shires.”

The most widely used measure of deprivation in England is the Index of Multiple Deprivation (IMD), which draws together information from seven areas – barriers to housing and services, crime, education, skills and training, deprivation, employment deprivation, health deprivation and disability, income deprivation, and living environment.

In an explanatory report on deprivation, London Councils said: “We believe deprivation should continue to play a central role in any new local government funding formula.

“The government is looking at alternative deprivation measures, which are likely to include the IMD due to be updated in 2019.

“London Councils has particular concerns that the higher costs of housing within London and other towns and cities are not properly reflected in the current IMD and that this could significantly understate the true levels of poverty within the capital.”