‘Council not hit as badly as others’
PUBLISHED: 11:45 20 February 2011
THE Welwyn Hatfield budget is NOT the second worst hit in the country – there are 178 district councils who are worse off in terms of spending power.
That’s according to MP Grant Shapps, who hit back at claims at last week’s full council meeting he was not doing enough in his capacity as local government minister to stop the £2.2m cuts.
Mr Shapps said claims by Labour and Lib Dems were “absolutely not true”, but understood the concerns, so much so he is to completely change the system so the facts are no longer “impossible to penetrate” and that councils could keep some or all of their collected business rates.
“The claim is factually incorrect and very misleading,” said Mr Shapps, who is also housing minister.
“In fact Welwyn Hatfield is experiencing a 5.3 per cent reduction in its spending power this year.
“It’s not that Welwyn Hatfield has made up this figure, but that they have extracted just one element of the very many calculations that go into working out the Finance Settlement.
“That’s like picking a figure part way through the calculation and calling it the final number.”
Mr Shapps said the figure was not a true reflection as it was found from the ‘Floor Damping’ system, which was designed to protect areas from experiencing disproportionate changes in the size of their government grant from one year to the next.
“Welwyn Hatfield’s claim to be the ‘second worst hit’ council in the country is not because it has received the second worst reduction in grant,” he said.
“It is because, if it wasn’t for this Floor Damping system, Welwyn Hatfield would have received the second biggest increase in formula grant, compared to other shire districts.”
Mr Shapps added he had such a “tremendous amount of sympathy” with the concerns and agreed so strongly with them that he wants to introduce a “far more self financing” system to local government.
“The entire process [currently] is intended to deliver money to where it is needed and then as a later part of the formula weird things like Floor Damping kick in and change the picture.
“[We’re] in favour of a process where local councils become far more self-financing, through things like being able to keep some or all of the business rates that are collected within the borough.
“So this settlement and next year’s, where incidentally there will be 199 districts or boroughs worse off than Welwyn Hatfield, will be the last two under this broken approach to providing cash to local communities.”
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