Eric Pickles warned he is bringing North East councils close to bankruptcy

Newcastle City Council leader Nick Forbes writes letter to Communities Secretary outlining concerns of North-South divide in funding reductions

Communities Secretary Eric Pickles
Communities Secretary Eric Pickles

Communities Secretary Eric Pickles has been criticised for imposing a “fairness deficit” on Newcastle.

As councils across the region prepare to finalise a fourth year of budget cuts, efforts to convince ministers of the North-South divide in funding reductions has intensified.

The Communities Secretary has even been warned he is bringing many councils close to the brink of bankruptcy with his frequent cuts.

While a delegation from the region headed to Whitehall, Newcastle Council leader Nick Forbes wrote to Mr Pickles hitting back at Government claims to have protected local Government in the last Autumn Statement.

Mr Forbes said: “I think what you mean is that there were no additional cuts announced, but that the significant cuts that have already been announced will be implemented; Newcastle faces a cut of £20m next year alone.

“To say that local government has been protected is a nonsense. It has been cut by more than any other part of the public sector, and has faced cuts much higher than the central functions of your department.”

Council leader Nick Forbes
Council leader Nick Forbes
 

The Labour leader adds: “Our main concern is that you are about to place councils in a position where they can no longer fulfil their statutory duties (go bankrupt in effect) and a number of council leaders and elected mayors have warned you of this.

“Nothing from you or your department appears to suggest that you understand the situation, or worse, you are aware of it but chose to purposefully ignore it.

“If you allow this to occur the impact on services and people will be significant.”

The council warns that in 2015 Newcastle’s spending power is cut by £115 per dwelling and Windsor and Maidenhead’s increases by £41 per dwelling. As with Northumberland and other North East councils, much of the lobbying has been based on a sense of unfairness in the cuts.

Ministers though have repeatedly said that spending power for North East councils is still hundreds of pounds higher per head than in many parts of the South East.

Local government minister Brandon lewis has defended the Government, saying: “Manchester, Liverpool and Newcastle all have higher spending power per dwelling than the national average. When talking about what local areas have, it is important to put that in the context of the starting point.

“The average reduction in spending power is only 1.3% this year and we are protecting individual council tax payers by offering a council tax freeze.

“We are protecting councils through the rates retention scheme’s safety net, which generates a minimum level for their baseline funding, which Newcastle will benefit from, although it was unable to do so previously.”

He added: “The point of spending power is that it shows exactly what a local council has in total to spend on its local community. In Newcastle, the amount is one of the highest in the country.”

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