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LGA Conference 2013: Sir Merrick demands end to Barnett formula

Council chiefs today demanded a radical overhaul to how public spending is allocated to give English councils a voice in funding decisions affecting the United Kingdom.

Council chiefs today demanded a radical overhaul to how public spending is allocated to give English councils a voice in funding decisions affecting the United Kingdom.

Making his keynote speech on the first day of the Local Government Association's (LGA) annual conference held in Manchester, LGA chairman Sir Merrick Cockell outlined a ten point plan to transform how local government is funded, structured and works with central government.

Topping the LGA' chairman's demands was a call for the abolition of the 35-year old Barnett formula - which favours the devolved administrations of Northern Ireland, Scotland and Wales.

‘So, first on our list of big ideas is to scrap the outdated Barnett formula and replace it with a new needs based funding model,' Sir Merrick said.

‘Once England is able to determine its own financial fate, we propose a model based on need, with decisions about the financial distribution taken out of the hands of national politicians and replaced with an agreement across English local government.'

Sir Merrick argued the case for the establishment of an England office merging six civil service departments – DCLG, the Department for Energy and Climate Change, Culture, Media and Sport, the Department for Transport, Defra and parts of the Home Office and Department for Business Innovation and Skills.

He also called for local government to be allowed to negotiate spending settlements directly with the Treasury through multi-year funding deals tied with the lifespan of a Government.

According to Sir Merrick, LGA financial modelling, updated to reflect last week's Spending Round, indicates 56 councils from across the spectrum would be short by at least 15p for every £1 they are committed to spend in 2015/16.

The number of councils whose estimated income would make up less than 85% of their projected spend in 2015/16 had decreased from 86 after last week's announcement of a £2bn cash transfer from NHS budgets to integrate health and social care - but this was still too many, he added.
 

Jonathan Werran

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