Council’s funding is down 40% in five years

GOVERNMENT funding to Northumberland County Council will have fallen by almost 40% in real terms over the five years up to 2019-20.

The House of Commons Library has published a briefing paper examining changes in local authority grant funding, spending power and spending per person.

The figures for Northumberland show the real-terms Government grant to the county council was £125.82m in 2015-16 but it has dropped every year since, the current year’s grant just £84.02m and next year’s set to fall further to £75.7m - a five-year change of -39.84%.

However, the analysis makes clear local authorities vary in the amount of money they raise and retain in taxation, business rates and other forms of income and “it is therefore sometimes more useful to look at spending power, which takes these into account.”

On this measure, the five-year forecast still shows a decrease but of just 3.91%, from £277.52m in 2015-16 to £269.61m this year and £266.66m next year.

There were also small increases in spending power in the previous two years, although not enough to take the figure back near 2015-16 levels.

In terms of what the council has actually spent, this has dropped from £614.09m in 2010-11 to £540.28m last year, although this was a slight rise compared to 2016-17 and there was a small uplift in 2013-14.

When you look at the real-terms figures (based on 2017-18 prices), the fall is more stark - from £686.13m down to £540.28m with every year showing a drop compared to the one before.

These figures include ringfenced grants for the likes of schools and public health, which is why they are much higher than the spending-power data above.

Looking at the national picture, the paper reports inner London boroughs receive more grant funding per person from central government than any other type of local authority, while shire counties and the districts within them receive the least.

However, again, these variations are considerably reduced when looking at local authorities’ core spending power, which takes into account the amounts of money each authority can raise.