Copied from Local Gov Chronicle online
Minister considers further funding for worst hit
30 October, 2012 | By Ruth Keeling

MPs have appealed to ministers to extend transitional funding support for a handful of councils worse affected by the government’s cuts programme.

Ministers have promised to consider the plight of a dozen district councils facing cuts of up to 29.3% in their core funding next year as transitional funding set aside for the first two years of the spending review dries up.

Graham Jones (Lab), MP for Hyndburn and one of the areas affected, said 10 of the 12 districts were among the most deprived in England and all of the dozen faced a reduction of 22% or more “despite the chancellor’s suggestion in the Autumn statement of 2010 that no authority will suffer cuts greater than 8.8%”.

Describing the scale of the cuts as “cruel”, Mr Jones called on the government to include the transition funding in the funding baseline which will be set as local government moves from the existing funding formula to a system of partially retained business rates.

Local government minster Brandon Lewis (Con) said the grant was “only ever intended as a one-off, temporary funding stream. Councils will have realised that from the fact it was referred to as a transition grant”.

Mr Lewis also said the new funding system would “create direct links between rates collected and local authority income, thereby increasing the financial incentive for local authorities to drive economic growth”, although Mr Jones argued the councils concerned would need funding to invest in the “infrastructure, skills and apprenticeships” needed for local economic growth.

The minister said the department’s consultation on the business rate retention scheme had elicited a number of responses relating to the transition funding. “I am actively considering all the views that we have received from across the piece for the need for transitional relief funding for 2013-14” in the December settlement, he told MPs.