SIGOMA Chair talks to the Big Issue about local government finances

Posted on December 23, 2024

The issue is twofold, explains Houghton. Government funding has fallen, while social care demand has increased.

“There was a big shift in 2010,” Houghton explains. “Prior to that, money was allocated on two basic principles. One was need. The other was how much council tax you could generate. If you were in a high needs area with a low council tax base, you’d get the grants to cover the gap.”

But the Conservatives slashed direct grants in favour of a funding model weighted more heavily toward council tax.

In the decade that followed, councils’ overall core funding per person fell by 26% in real terms, on average, with higher council tax revenues only partially offsetting a 46% fall in funding from central government.

The reliance on council tax meant that poorer areas – which generate less council tax revenue – lost out. In the most deprived tenth of councils, funding per person fell by 35%, compared with 15% in the least deprived areas.

“Inevitably, areas with the highest levels of deprivation can’t raise much money through council tax, they’re reliant on grants,” Houghton said.

“Over the last 14 years there has been a fundamental breakdown in the relationship between funding levels and need.”

Read the full article with further comments from our Chair, and Cllr Gary Haley, Cabinet member for Children and Young People at Gateshead MBC, in the Big Issue here.