Newham refers Pickles' settlement figures to watchdog

14 Jan 11
A London borough has made a formal complaint about the use of statistics by secretary of state Eric Pickles in last month's local government finance settlement.
By Lucy Phillips – exclusive


14 January 2011

A London borough has made a formal complaint about the use of statistics by secretary of state Eric Pickles in last month’s local government finance settlement.

Sir Robin Wales, mayor of Newham, has written to the UK Statistics Authority objecting to the focus on overall ‘revenue spending power’ in the settlement. By this measure, no council would face a spending power cut of more than 8.9% in either of the next two years and average cuts stood at 4.4%.

A week later, Pickles’ department released a document, entitled Residents can now see where council fundinggoes, listing only formula allocations to councils and the amount spent per head. This showed higher amounts of cash going to deprived areas, such as Newham.

At the time, councils said the headline figures masked much greater cuts – of up to 17% – while an analysis by the New Local Government Network showed the most deprived areas took the worst hits. Jules Pipe, mayor of the London Borough of Hackney, accused the government of financial ‘smoke and mirrors’. 

Wales has now formally charged Pickles with ‘trying to pull the wool over the public’s eyes’. He told Public Finance: ‘Why use one set of statistics one week and completely different figures the next if not to secure favourable headlines? Of course, the real story is that he’s trying shift attention from the swingeing cuts his department has imposed upon some of London’s most deprived areas, while boroughs like Richmond escape lightly.

‘There are obviously different levels of need between different areas and it is right that this is recognised in the funding. People in the poorest areas tend to need more support and are more reliant on services than those in richer, leafier areas. If Pickles does not believe in giving extra support to those in need, he should come out and say so.’

A spokesman from the UK Statistics Authority confirmed they had received the letter from Newham and were looking into it. The body will respond publicly in due course, potentially reprimanding Pickles if his use of statistics was misleading.

The Department for Communities and Local Government said the Local Government Association had suggested that focus on revenue spending power in the settlement.  ‘It was something that was requested by the LGA to give a fair reflection, because formula grant is only one part of the funding that local authorities receive. The formula grant does not give the full picture,’ a spokesman told PF.

But the LGA rejected the department’s assertion. A spokesman said: ‘With a number of grants being rolled into the baseline of formula grant, we were concerned there was a significant risk that many authorities would experience large swings in their total funding from government. This was something we wanted to avoid.
 
‘Whilst the LGA does not take a position on the distribution of government grants, we suggested that the government should take into account an authority’s overall budget position, reflecting its income from all sources, before making a final determination on its grant allocation. However, we did not suggest any particular methodology for how this should be done.’

Local government minister Bob Neill also retorted: ‘This is a desperate political stunt by Robin Wales to try and deflect attention away from the monumental waste of taxpayers’ cash he has overseen at Newham.


‘His vanity makeover on the council offices has left the taxpayer £111m out of pocket during one of the toughest economic climates. To add insult to injury, spending nearly ten thousand pounds on designer lights for the authority's offices is indefensible by anyone's standard.

‘Wales should do the right thing and dig into his own pocket and pay back the cash back.’

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