Angela Rayner is gone and now you’re twelve million quid worse off. That was the message received by Trafford Council in Greater Manchester from the government this week. The northern council is one of several that have lost out after a controversial change to the funding formula for local government. You can read more about that here and how it’s yet another after-tremor of the fall of the former deputy prime minister (a moment historians will assign great meaning to when they write about this Labour government).
The provisional local government finance settlement is currently being digested by Labour MPs who represent those seats, some of them the most deprived places in the country.
I got a call from one of them today. What followed was an extraordinary diatribe against the party leadership from someone who was only recently a loyal backbencher. “I’m absolutely furious. I am so angry. The north-south divide is getting bigger under a Labour government. And what it looks like for the north west and the midlands is that austerity is going to continue while you’ve got Heathrow expansion, train lines for Oxford and Cambridge and the rest. It’s like two different countries. We promised change in the election and we have been made to feel like idiots. We’re supposed to be sorting out inequality not adding to it.”
Another said: “I’m fuming. I was that angry last night I couldn’t sleep.”
Others are privately roiling and preparing to make public statements. This follows bubbling anger over the past few weeks, despite attempts by Housing Secretary Steve Reed to assuage fears.
The nub of the changes is that Steve Reed, when he replaced Rayner as housing secretary, changed the criteria for deprivation to add housing costs into the mix (along with other changes relating to remoteness and population). This was done after lobbying from MPs in London and the south east. And voila, the new formula ended up giving millions more in core spending power to places in London and the south east.
The top five winners from the finance settlement, released on Wednesday, are Luton, Enfield, Harlow, Hounslow and Hillingdon. The major losers are Trafford, Wigan, Sunderland, South Tyneside, Gateshead, Knowsley, Stockport, St Helens, Wirral, Sefton and North Tyneside. A lot of places we might call “Labour heartlands”.
It is worth remembering the argument from Reed’s team, that anything is better than the current funding arrangement and this shouldn’t be presented as a North vs South issue. The problem is that Labour MPs aren’t listening.
An earlier version of this article said that “housing prices” had been used to calculate the new funding formula, when “housing costs” was the correct term.
[Further reading: MPs revolt as Labour ditches more Rayner reforms]
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