We are undertaking a review of local authorities’ relative needs and resources to develop a new, more transparent funding formula that will be fit for the future. We are making good progress in collaboration with the sector and recently launched a consultation that will close on 21 February.
This financial year the Government have granted Crawley Borough Council more than £700,000 for homelessness reduction, and this coming financial year it will be more than £800,000. However, the leadership of the council are complaining about a lack of capital funding for a homeless shelter when it has reserves of more than £21 million. Can I have an assurance from the Department that local authorities will be asked to properly deploy their resources to help the most vulnerable?
The people of Crawley are lucky to be represented by someone who had a very successful career in local government. My hon. Friend is excellently well placed to know that any council should look at using its excess reserves first, rather than refusing to invest in local services or unduly increasing the burden on hard-working taxpayers.
This Government support communities that wish to take greater ownership of local decision making. I encourage my hon. Friend and Southport residents to formally petition the council to undertake a community governance review. That will ensure they have the opportunity for their views to be properly considered.
Getting back to helping the most vulnerable, in the consultation document, the Secretary of State proposed to remove deprivation completely as a means of allocating resources from the foundation element of the formula, the non-care element, and rely totally on per capita allocation. Does the Minister not accept that people in the most deprived communities are more likely to use public transport, more likely to need the help of a housing officer and more likely to use council leisure facilities because they cannot afford those in the private sector? If he will not reinstate deprivation as part of the formula, does he accept that the whole review will become known as the very unfair funding review?
This is a consultation, and I would be happy to receive informed opinion from the hon. Gentleman, the Chair of the Select Committee. I would point out, however, that the funding formula covers broadly universal services used by the majority, if not all, of a council’s residents. As we disclosed transparently in the consultation document, population is by far and away the most important factor driving the need for those services. Deprivation was shown to account for less than 4% of the variation in spend in the area.
South Cambridgeshire District Council, deprivation rank 316, has seen a spending power cut of just £21.85 per household this year compared to 2010. Knowsley Council, deprivation rank two, has seen a spending power cut of £1,057 per household, while Hackney, deprivation rank 11, has seen the largest cuts in spending power of £1,406 per household. How is that fair?
There are lies, damned lies and statistics. The Minister cannot get away from the fact that poorer areas are poorer on his watch and that health inequalities are widening on his watch. The situation is set to get worse as he seeks to continue with his reverse redistribution, shifting funds from the poorest communities to some of the wealthiest. Will he now agree, in the interests of transparency, to Labour’s call for the National Audit Office to independently scrutinise the fairness of his so-called fair funding review before it is implemented?
I do not think that I heard a rebuttal of the statistics I outlined. It is clear that the Government are supporting people in every part of the country. We are providing £1 billion of extra funding to deliver social services and a real-terms increase in funding for local government in the next coming year.