The government needs to live up to its promise and end austerity

10 Apr 19

Local authorities need some funding certainty - especially around money intended to replace EU support, says Labour’s Andrew Gwynne. 

Town hall


We have seen this week that yet again the government is failing in its duty to protect communities by failing to give details of EU replacement funding.

Let’s remember that at the beginning of March the government announced the creation of a new £1.6bn Stronger Towns Fund.

After nine years of Tory austerity that have crippled our regions and communities, you would have expected politicians in Westminster and town halls from across the political divide to welcome any new investment, but the way that this announcement has unravelled served only to highlight the government’s failure to properly address the needs of the towns, cities, and regions.

It quickly emerged that the headline announcement of £1.6bn was in fact spread over six years, equivalent to just £260m a year. 

Compared to the cuts that the government has inflicted on local councils across the country, this new funding announcement was a drop in the ocean – and it is no surprise that the announcement has been greeted with derision.

And compared to the funding that English regions would have received from EU development and social funding, the Tories new announcement was £642m a year short. In the North West it was £179m short, in the West Midlands £81m short and in North East £75m short.

It is worth remembering that the government has cut core funding for councils by almost £16bn in the last decade, and is cutting £1.3bn from council’s Revenue Support Grant this year alone.

'Rather than falling back on gimmicks and sticking plasters, the government should be living up to their promise to end austerity in local government, and to clear up the continued uncertainty that local authorities are facing.'

Rather than falling back on gimmicks and sticking plasters, the government should be living up to their promise to end austerity in local government, and to clear up the continued uncertainty that local authorities are facing.

Councils have no certainty regarding future funding beyond 2020, and with Brexit looming ever closer, councils are still unsure of what the impact will be on their local economies, their workforce, and key services once we leave the European Union.

After nine years of Conservative austerity in local government, the finances of many councils have reached breaking point. The cross-party Local Government Association has stated that councils are facing a funding gap of £3.1bn just to maintain services in 2019/20. This funding gap will rise to £7.8 billion by 2025 if no action is taken.

This is why the government’s lack of clarity around the UK’s Shared Prosperity Fund, which will replace EU funding often channelled through councils, is so problematic.

I asked the secretary of state this week for clarity about whether communities, including the most deprived in the country will see pound for pound less money that they currently do under EU funding. The secretary of state refused to answer.

The government is holding communities to ransom.

The chancellor announced that he’ll only inform councils how much money they’ll get from the replace scheme if MPs sign off the prime minister’s botched and broken deal which will leave communities worse off.

The government need to do the responsible and correct thing and give councils and communities certainty. They need to guarantee that no council, no neighbourhood, no community will be worse off under the Shared Prosperity Scheme.

We were promised a Brexit dividend. At the moment this seems like yet another broken promise.

Labour has been very clear that our country’s regions and towns deserve better than this ill-thought out £1.6bn announcement and better than the government’s failure to be clear over replaced EU funding.

They appear solely to be concerned with announcements seemingly devised only to generate short term headlines, rather than the long term growth our forgotten regions need to thrive.

Our communities should receive the funding they need which will deliver decent public services for all.

If the government will not act in the nation’s interest then they should stand aside and let a Labour government build a society for the many, not the few.

  • Andrew Gwynne
    Andrew Gwynne
    Labour MP for Denton & Reddish, and shadow secretary of state for communities & local government

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