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The formula for how much money councils get from central government is pretty impenetrable. A big chunk is passed directly to schools and so it is probably helpful to leave this item to one side. Then essentially the richer an area is the less they get – both because their "needs" are lower and also because the amount raised on Council Tax is higher on posher properties.

Everyone always complains that they are unfairly treated.

For example The Times (£) on Tuesday featured Richmond-upon-Thames getting an easy ride. However an analysis I have been sent from London Councils shows Richmond getting a cut in Formula Grant of 14.3%.That is the joint highest in London (Bromley and Kingston are cut by the same level.) On the other hand in terms of "spending power" the figure is much less significant as Richmond gets such a lot of its money in Council Tax (something the Council Taxpayers in Richmond will be familiar with.)

Surrey County Council get most of its money from Council Tax. So its £25.5 million grant cut is a lot as a proportion of its grant – but not of its "spending power."

Is it worth councils devoting a lot of time and energy to lobbying and whining about their settlement being unfair? I don't think so. When Wandsworth had the lowest Council Tax/Poll Tax under the Thatcher/Major era it was claimed to be rigged by a generous grants settlement. But during the Blair/Brown era it continued to  have the lowest Council Tax in the country.

This doesn't mean there want be a political problem in perception of unfairness. "Robbed: Our cuts pay for rich South," screams the Northern Echo. Darlington is getting a grant cut of 11.65% – notably smaller in percentage terms than Richmond-upon-Thames.

Durham is also complaining about grant cuts. Looking at the figures its formula grant is going down from £263 million to £235 million. For Surrey it's going down from £178 million to £152 million.

Durham is a council which spent £50,000 on eight Christmas trees last year – £6,250 a tree. It is a high spending council on spin – £3.729 million. This is also a council that employs four European Officers, five Diversity Officers, two Climate Change Officers – plus an undisclosed number of staff working full time for unions. They also refuse to say what salary their Chief Executive is on.

By the way, Durham also sitting on reserves of £93 million.

9 comments for: Has the north been harder hit in Council grant settlement?

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