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Gove won’t ‘level up’ with an extra £1.50 per person per year

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With the government’s settlement for local councils announced this week, our columnist ANDREW FISHER takes a look at what Michael Gove and his so-called ‘Levelling Up’ department is really offering

“Billions more for councils to build back better” reads the upbeat press release from the newly rebranded Department for Levelling Up, Housing and Communities – which to you and me is the bit of government that funds local councils.

Not what it might seem: Tory minister Michael Gove

Good news for Croydon then, which – depending on who you listen to – has either lost around 80 per cent of central government funding in the last decade or has been driven to rack and ruin by the local administration in Katharine Street.

Either way, Croydon Council definitely needs more funding to build back better.

First, let’s just look at the recent funding context.

Adjusting for inflation, in 2015-2016 Croydon was receiving £146million per year from government. This year, that figure was just £88.2million – a 40 per cent cut.

Next year, when councils are promised “billions more … to build back better”, Croydon will receive just £88.7million – a £500,000 increase, or an annual uprating of just 0.57 per cent.

This equates to an extra £1.50 for every Croydon resident over the course of a year.

Even in a normal year, such a marginal increase is likely to be eaten up by rising demand, for things like children’s services and social care, but when councils are struggling with another wave of the covid pandemic, it is far, far short of the funds needed to even stay afloat, let alone build back better.

Price tag: rebranding a Whitehall department for the benefit of political masters Gove and Johnson is likely to have cost more than £500,000

The increase given to Croydon is likely to be considerably less than the cost of the recent rebranding of the Ministry for Housing, Communities and Local Government to become the Department for Levelling Up, Housing and Communities: when the Ministry of Agriculture, Fisheries and Food was remodelled as the Department for the Environment, Food and Rural Affairs nearly 20 years ago, that came with a price tag of £529,000.

Michael Gove, the new Secretary of State for “Levelling Up” announced the local government settlement by saying, “Today’s funding package… will make sure councils can improve vital frontline services, support vulnerable people and protect residents from excessive Council Tax rises.”

What Gove defines as excessive is anything over a 3 per cent rise in Council Tax bills. But with inflation currently over 5 per cent, that means the council is taking a real-terms cut as their costs – wages, goods and services – are rising faster.

Many of the poorest residents in Croydon will be seeing their Council Tax bills increase by more than 3 per cent in 2022, as in addition to the rise, some are currently scheduled to lose some or all of their Council Tax Support.

Far from rolling about in excess cash like a real-life Scrooge McDuck, whoever is elected as Croydon’s executive Mayor next May will inherit a dysfunctional and underfunded council. They won’t be building back better, but cutting more and making things worse.

Ducked up: only in ‘Gove world’ are local councils swimming in money

The reality is a far cry from Gove’s stated desire that councils, “have a major role to play in our central mission of levelling up the country”.

Labour’s laborious process for selecting its mayoral candidate is yet to conclude, but the Conservative mayoral hopeful, Councillor Jason Perry, is in place.

He should be using his campaigning advantage to shout his outrage from the rooftops at the paltry crumbs provided to Croydon from Gove’s table. Instead, there has been a deafening silence.

Perry has however complained that, “under Labour, the Council Tax Support Scheme… is set to be cut by £5.7 million”. What Perry fails to mention that under the Conservatives, Croydon’s central government funding has been cut by 10 times that amount since 2015-2016.

What Perry also omitted to mention in his Conservative mayoral candidate’s spiel is that the only reason we have Council Tax Support schemes at all is because in 2013, the Conservative-led government scrapped the centrally funded Council Tax Benefit scheme, leaving councils to design and administer their own local schemes of ‘council tax support’, with much-reduced funding.

Gove’s half a million in extra funding for Croydon won’t go very far in restoring support to the poorest households in Croydon.

If we look over the boundary to neighbouring Lambeth, a borough with a smaller population than Croydon, our northern neighbours will receive £144.9million next year (£56.2million more than Croydon). Lambeth’s settlement is up by an extra 0.69 per cent, which is slightly higher than Croydon’s 0.57 per cent uptick, but again, hardly of the magnitude to “build back better”.

Both Labour candidates for selection to run for Croydon Mayor – Val Shawcross and Cuncillor Callton Young – have promised that they will lobby government to increase Croydon’s funding to that received by Lambeth: something a department committed to “levelling up” should be quite receptive to, shouldn’t it Mr Gove?

Now that could really help Croydon build back better.

South Norwood resident Andrew Fisher, pictured right, has worked as a trades union official, researcher and writer, and served as Director of Policy of the Labour Party under Jeremy Corbyn from 2015 to 2019. He is the author of The Failed Experiment – and how to build an economy that works

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