The English Core Cities welcome the opportunity to respond to the ODPM consultation document on Local Government Formula Grant Distribution. While each city will also be submitting its own detailed response, the Core Cities hope that this additional collective response will serve to stress the implications of several options and proposals in the consultation document for the Core Cities, and highlight the relationship between FSS reform and the Government’s broader ambitions for the Core Cities.
The Core Cities group exists to develop and share understanding of the distinctive role that major cities play in national and regional life. Since the mid-1990s, we have worked together with the support of government to work out how the Core Cities can contribute positively to reach Britain’s overarching goals of sustainable growth and greater social equity. Through our work, we are now in a stronger position than ever before to understand what the Core Cities can do to improve performance in a similar was to some of our European competitors.
Of particular importance is the shared recognition of the key role of cities as the economic hubs of their wider city regions, in which the critical mass of assets that drive economic performance are located and need to be nurtured. There remains a huge challenge for each of us in generating the innovation, supply of skills, connectivity, economic and social diversity and quality of life that will bring us up to speed, and we must ensure that we have the strategic decision-making capacity to enable us to meet this challenge.
The outcome of the FSS consultation is important to this agenda. If we are serious about the importance of the Core Cities to Britain’s future economic prosperity, and about those cities having the capacity to drive the necessary change, it is important that Government policy supports this, and decisions are not taken that unnecessarily or unfairly undermine that capacity.
This response highlights a number of issues that we consider are important to the Core City agenda. More detailed responses to the specific questions that were asked as part of the consultation paper are being submitted by individual councils. We trust that ministers will give careful consideration to the issues and points that we have identified.
It is important that the settlement gives a positive message and outcome that supports the regeneration of cities, which will help Core Cities build upon the achievements that have been made to date. In recent years significant activity has been undertaken with support from Government to bring life back into the heart of our cities and to halt the decline in population that was threatening their vitality. Visitors are also important to the vitality of Core Cities, bringing economic prosperity, but they do have an impact on the cost of providing some services. It is essential that this population growth and buoyant visitor numbers are reflected in the revenue grant that Core Cities receive.
The latest 2004 mid year population estimates show that these strategies are being effective and the population in all Core Cities increased when compared with 2003 mid year estimates. After years of decline in population and resources that this brought, it now appears that this recovery will not be reflected in the Revenue Support Grant Figures for several years as the intended move to population projections is based upon outdated population trends. It is likely that 7 out of the 8 Core Cities will lose out by the change from population estimates to projections. Indeed the Government will be assuming that 3 Core Cities are still in population decline. This will be a very disappointing message to local taxpayers, and will be extremely frustrating for local politicians and stakeholders. It is essential that the recovery of Core Cities is recognised in the population figures used to calculate grant.
Core Cities attract visitors and commuters who bring economic prosperity and jobs. It also involves the councils in some additional costs in providing facilities that are often regional facilities and in cleaning up and providing services to visitors. The number of visitors is a factor reflected in FSS. It was puzzling at the time of the last review that night time visitors were removed from the formula, when day time visitors were still included. There is a firm view that there has been a growth in the number of visitors being attracted into cities for a variety of reasons. The new data set for visitor numbers sets out a bizarre picture of considerable reductions in the number of visitors to most Core Cities despite a 20% national uplift. This is clearly counterintuitive and not credible and we would urge that the questionable data is not used in the settlement.
Core Cities are seeking to improve the health and quality of life of our citizens. The industrial heritage and high levels of poverty in many Core Cities have contributed to lower life spans and poor health that puts added pressure on social services. Cities also attract people who need access to major hospital and other specialist health facilities, which often results in higher demand for some social services. It is important that the new Social Services formula adequately reflects these issues and there are concerns that the current proposals will not do so.
The integrity and credibility of the grant system depends upon confidence in the data that is being used, use of up to date information about needs and local tax resources (including the need for resource equalisation and an up to date revaluation fo the tax base that would allow changes in tax bandings), transparent formula and justifiable adjustments for area costs and damping arrangements.
Transport services are at the heart of the effective operation of our cities and adequate funding for highway and transport services is therefore particularly important. Funding for concessionary fares, bus support and highway maintenance should fairly reflect the pressures in these areas including the move to a statutory free concessionary fare scheme next year.
Issues that are common to most Core Cities and will be reflected upon in more detail in individual responses include support for –
We hope that the Government will give careful consideration to the issues raised here and in the detailed responses of individual Core Cities. Adequate mainstream funding is essential to enable Core Cities to improve the economic and social wellbeing of their City Regions.