£11m a year fair funding call to Government

People in Telford and Wrekin are losing the equivalent of £11 million of funding a year for local services.

£11m a year fair funding call to Government

This is because the way councils are funded penalises those with low council tax and more homes of relatively lower value than other councils.

If Telford & Wrekin Council received just the average level of “spending power*”, it would be able to avoid many of the service cuts it now faces including to libraries, youth services, community centres. It could also cut its debt by around a quarter over the next five years.

Government figures show that the average “spending power” for English councils is £1,829 per home next year. But for Telford & Wrekin it is only £1,676 – equivalent to £153 less a year for every home in the borough.   

Over the lifetime of this Parliament will roll up to £55 million that the borough misses out on.

The Council says the key reason is because it is a low council tax authority with the second lowest council tax in the region.  This is compounded by almost 2/3 of homes in the borough falling in the lowest A and B council tax bands. The average home in England is in the more expensive band D.

Together this means that any increases in council tax, such as the Government 2% adult social care levy assumed from April, generates proportionately less extra funding than for an authority with higher council tax and higher average band homes.

The Council also loses out because of two other anomalies in the settlement which it says sees the borough’s true population undercounted and a Government “damping” mechanism to help limit cuts to councils elsewhere in the country to the disadvantage of councils such as Telford & Wrekin becoming permanent.

Councillor Lee Carter, cabinet member for finance, said:  “We are effectively penalised for giving our residents good value for money and keeping council tax bills low.

“All we are asking for is a fairer approach for the people of Telford and Wrekin.

“Just to have the average spending power of other councils would mean many of the proposed cuts that most concern the public such as to libraries would not be needed.

“It is not right that our residents should face reduced funding for local services because they happen to live in homes that are less expensive than the national average and have a council that gives them value through a lower council tax.

“All we ask for is fairness and we will be seeking support from our local MPs, local residents, businesses and other concerned parties to press the Government  to bring the borough up to average through a mechanism that offers some form of reward for councils like Telford & Wrekin who keep their bills as low as possible.”

*Spending power is a Government calculation for how much councils receive made up of Government grant, council tax  and businesses rates, of which the council currently keep 49%