Government funding reductions could see Stoke-on-Trent City Council face £50m cuts
GOVERNMENT ministers have masked the scale of cuts facing the region's councils by 'smuggling' huge reductions into the second half of a two-year funding agreement, it is claimed.
Eric Pickles pledged Stoke-on-Trent City Council would lose just 0.2 per cent of its 'spending power' next year in the latest round of Government cuts to council funding – handing the council one of the best settlements in the country.
But the authority's finance managers say emerging details about the second year of funding in the same settlement mean spending power will actually be cut by more than five per cent over two years.
It means cuts of £50 million – including £21.1 million in 2013/14 – will go ahead.
Peter Bates, the city council's director of finance, accused the Department of Communities and Local Government (DCLG) of releasing inaccurate funding information in an error-strewn official email.
He said: "It's hugely disappointing from my perspective. They are still doing their sums. We still don't have all of the information we need but based on the headline figures they have provided we are much worse off than suggested.
"I received a personally-addressed email today from the civil service at the DCLG – and the figures do not even add up. That's the sort of professionalism we're dealing with at the moment.
"Funding for 2013/14 will be better than predicted, although by how much is still not clear. But what they have given us in 13/14 they have taken away, and more, in 2014/15."
Mr Pickles has faced criticism for releasing funding data based on 'spending power' calculations, which offset funding cuts by taking into account assumed income from the NHS, house-building bonuses and business rates.
Newcastle Borough Council expects the true scale of cuts to be more than double the DCLG's announcement of a 2.1 per cent reduction in spending power – leading to additional cuts of £1 million from 2014.
City council leader Mohammed Pervez, below, said: "They have fiddled with the figures to make the percentages look lower. If you look at the detail, we have again been hit very hard.
"To some extent the percentages are irrelevant. We want to know what the absolute cut to our funding is and they still haven't made that clear. In the first year we probably are a little bit better off than expected – but they are taking all of the money back and more in the second year.
"We are expecting to have to make savings of £50 million over two years. It is our worst nightmare, brought to life.
"They've made it sound like they've done the city a favour but in fact these are deep cuts which are seriously undermining our efforts to provide jobs and growth in the city."