Poor communities lose out on central government funding

 A heavy weight think tank has concluded that funding of public services in England is skewed against poor areas.

The Institute for Fiscal Studies (IFS) argues that levelling up funding plans are being hampered by a funding system that is “not fit for purpose” and deprives the poorest areas of the financial support to match their needs.

The IFS said that the method for allocating money to pay for public services is out of date, based on inadequate data and skewed in favour of the better-off south-east.

Calling for urgent reform, the think tank said the funding system was doing a “poor job” in ensuring money was being spent in the parts of England where it was most needed.

The IFS said the most deprived 20% of areas were getting a smaller share of local government and police funding than they were estimated to need, while the least deprived 20% were receiving a bigger portion than their needs required.

Plymouth City Council leader Tudor Evans told the EGF that central government pays little attention to communities far from London while our insider columnist the Reluctant Civil Servant has argued that central government makes local councils fight for bits of central government funding, wasting time, money and effort.

Sifting through competing bids – making communities dance for government handouts – also wastes central government time. And what do Whitehall civil servants and minister know about the specific needs of Plymothians, or Geordies?

The solution is simple. Decentralise power to the communities who know their own problems – and the solutions to them and give them the means to raise their own money to fund those solutions.

Central government needs to get out of the way of local communities and concentrate on the issues that only it can deal with ­ - defence, international trade and development. Leave the rest to the real experts on the ground.

Want to find out more? Download our report on Decentralisation HERE.