In the same week that Mayor Biggs will present his council budget proposals, the Mayor has called on the Prime Minister to scrap the controversial ‘Fair Funding review’.

New figures reveal that the ‘Fair Funding review’ – a Government review of council-funding which could take money away from areas of high deprivation like Tower Hamlets and redirect it to Tory shires – could mean that Tower Hamlets loses at least a further £3.1m in social care funding with significantly larger cuts still to follow once the ‘Fair Funding review’ is finalised.

The figures were compiled by the Local Government Association (LGA) and show that Tower Hamlets is estimated to lose £3.1m in social care funding alone, just one part of council funding; meanwhile Conservative council strongholds Hampshire and Surrey would see a £35m and £25m boost respectively.

The analysis looks at just one part of council funding, adult social care funding allocations, and examines what the Fair Funding review could mean for the distribution of adult social care funding across the country. Whilst the figures only show the potential impact on social care funding, they reveal the direction of travel that the ‘Fair Funding review’ is likely to have on council budgets more generally, indicating that the £3m loss for Tower Hamlets is just the tip of the iceberg.

Many of the changes that could result from the Fair Funding review are based on a new funding formula which significantly reduces the importance of ‘deprivation’ when calculating a council’s funding allocation, instead focusing on a ‘per head’ amount and increasing funding to rural areas.

The figures reveal that Labour councils stand to lose £328m in social care funding while Tory authorities are estimated to gain £156m however it’s unclear what the general election result, and the election of new Conservative MPs in former ‘red wall’ constituencies, will mean for the funding review.

Tower Hamlets Council has already had to save £190m since 2010 and on current information needs to save a further £39m by 2023.

Mayor of Tower Hamlets John Biggs said: “The Government’s Fair Funding review will not mean a fairer way of funding local councils but will instead funnel money away from Tower Hamlets into leafy Tory shires like Hampshire and Sussex.

“These figures from the LGA are based solely on what the Fair Funding Review might mean for social care funding, but they reveal the Government’s plans to cut council budgets in inner London and redistribute the cash elsewhere. This estimated £3m cut for Tower Hamlets is just the tip of the iceberg and it signals a much larger cut yet to come.

“We risk losing millions of pounds at a time when our budgets are already stretched to breaking point. I urge the Prime Minister to scrap the Fair Funding review and reinvest in our councils which have seen their budgets slashed over the last ten years.”

Cllr Amina Ali, Cabinet Member for Adults, Health and Wellbeing, said: “Cutting social care budgets in boroughs like Tower Hamlets would have an enormous impact on some of the most vulnerable people in our society. We are in the grip of a national social care funding crisis, with services facing a £1bn funding gap, and the so-called Fair Funding review looks set to make the crisis even worse.”

Tower Hamlets Council’s core funding has been cut by £148m in real terms compared with 2010. These cuts and growing demand for social care have meant the council has had to make £190m in savings over the decade.
Tower Hamlets Council’s core funding has been cut by £148m in real terms compared with 2010. These cuts and growing demand for social care have meant the council has had to make £190m in savings over the decade.
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