Every Council will claim that it gets the fuzzy end of the lollipop when it comes to grant allocation from central Government. So is the system fair? Bob Neill, the Tory MP and Shadow Minister for London, recently spoke in a Commons debate on local government finance and I was startled by his disclosure that his home borough of Bromley gets £64 million with a population of 300,000 while Croydon with a population of 340,000 gets £116 million.
Is there something wrong with the formula? Here is what Neill said:
"My final point about the inadequacies of the grant formula relates to the peculiar results for local authorities of similar size and in similar, neighbouring areas. Let us consider a discrepancy in the formula grant in the west midlands. Solihull has a population of 205,000 and receives £53 million. Walsall has a population of 253,000. I accept that it has some other social problems, so one might expect a difference, but it receives £133 million, so the leap is so great as to be beyond credibility. The same applies closer to home for me, in the London boroughs. Bromley has a population of 300,000 and it receives £64 million. The next-door borough of Croydon has a population of 340,000, so it should get a bit more—but it receives £116 million, so there is a huge difference. Those apparently perverse outcomes cause people to question the way in which this system works in practice."
Neill added that there were:
"suggestions that there is a degree of unjustified subjectivity in the operation of the system, and that needs to be dealt with if people are to have confidence for the future."