London children’s services funding could be cut in favour of the shires

Children’s social services in London could lose funding to county
councils under a government shake-up of local authority
finances.
Proposals to reform the funding formula for children’s social care,
being considered by the government, could see authorities in the
capital lose up to £25m with the shires enjoying many of the
gains.

The proposals, under discussion as part of a root-and-branch review
of the way councils are funded from 2006-7, reflect research
showing that deprivation is not as concentrated in urban areas as
had been assumed.

Under one proposal, children’s social services funding for Tower
Hamlets Council, including both government grant and an assumed
contribution from council tax, would fall by almost £25m.
Westminster Council’s would drop by nearly £18m, representing
almost half its current funding.

While the largest monetary gain – almost £12m – would accrue
to Birmingham Council, in percentage terms the biggest winners are
county councils, with Somerset’s 24.9 per cent increase the most
significant.

Dave Hill, head of children’s services at Tower Hamlets, said
funding cuts would eat into preventive work which had helped the
council keep the number of children in care low.

Chris Undrell, assistant director of finance at Westminster, said:
“We would be opposed to anything that would shift money and
resources out of London because we have significant needs and that
is reflected in what we spend.”

The formula is being discussed by a working group that includes
council representatives and proposals are likely to go out for
wider consultation in July.

Ministers are likely to make a decision on the formula in the
autumn ahead of the funding settlement in November.

Mike Heiser, senior project officer at the Local Government
Association, said the proposed shift in funds for children’s
services “suggests the pattern of distribution [of deprivation]
between authorities is flatter” than previously thought.

He added: “This means authorities at the higher end of current
funding lose out and those at the middle and bottom will do better,
so it tends to be redistributed away from London and towards the
shire counties.”