The plan to redistribute Whitehall funding away from wealthier local authorities in London and the south east and towards more deprived areas, particularly in the Midlands and northern England was one of Angela Rayner’s top priorities in office.
Sir Stephen Houghton, the Labour leader of Barnsley council and chairman of the Sigoma group of 50 local authorities in mainly Midlands and northern towns, said there could be “dire political consequences” for Labour at the next election because Reform were “breathing down our necks” in those seats.
Houghton has asked for an urgent meeting with Reed, the new Housing and Local Government Secretary, and his deputy Alison McGovern, to urge them to implement Rayner’s plans – which are due to be introduced next April – in full.
Houghton said that if the new funding was not delivered to his group’s council areas then their voters would lose faith in the Labour government.
More than a dozen councils have already been forced to take this step since 2018.
Serious political consequences
He added: “We’ve waited 15 years for fundamental reform to local government finance, and the government obviously instigated that last year.
“Because it’s absolutely crucial that we proceed with that… It puts the money where it needs to be to those that have suffered for the last 15 years, and we want to make sure we want to support the government in driving that through.
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“And if we can’t show, in the north and Midlands in particular, but in those other urban places like Plymouth and Southampton and Portsmouth and so on, that improvement that’s currently being promised, then clearly there could be dire political consequences for the [Labour] party.
He said his members were “getting really, really nervous, and we’re looking for assurances from ministers that all that hard work over the last 12 months, that 15 year wait, isn’t going to be lost”.
He added: “I can only guarantee you, you will be looking at section 114 notices en masse if they don’t push it through.
“So it’s essential that Steve and Alison and the new team recognise the importance of this for the future of local government across some of those deprived areas of the UK.”
The government said it is reviewing proposals for the council funding overhaul – known as the Fair Funding Review – and will publish a response in the autumn.
“We will give people the high-quality public services they deserve as part of our Plan for Change.”
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