Newspaper article The Journal (Newcastle, England)

Leaders Try to Keep Us out of the Black Hole; Changes May Cost the North Nearly Pounds 400m

Newspaper article The Journal (Newcastle, England)

Leaders Try to Keep Us out of the Black Hole; Changes May Cost the North Nearly Pounds 400m

Article excerpt

Byline: Adrian Pearson

THE fight to save North East councils from a budget black hole worth nearly pounds 400m will today be taken to Westminster. City leaders are warning that a Government funding review will see the region forced to reduce services for the elderly and see some of the poorest in the country left without help as a result of proposed changes.

Tonight MPs will gather to debate a motion aimed at putting pressure on ministers to ensure councils are protected as the biggest shake-up of council financing in more than a generation takes place.

The Government has said it is only fair to start allowing councils to keep the business rates they collect from local firms, ending the current system in which the money is collected by the Treasury from across the country and redistributed on a needs basis.

But with the North East having a much lower number of firms than areas in London and the South East it is thought the changes will leave councils with a long term inability to pay for key services.

The Association of North East Councils had teamed up with MPs to demand firmer assurances that the Government will offer a "safety net" to those most in need.

When coupled with wider cuts to council budgets, an end to deprivation grants and a snub in housing support grant, the council leaders say they face a "perfect storm" in which it will be almost impossible to provide the same level of services as those in the South.

Last night Sunderland Council leader and chair of the association Paul Watson said: "We believe that all people of the country should be able to have access to good services no matter who they are or where they live.

"There are some significant and far reaching implications arising from the Government's proposed reforms that could have a fundamental impact on the growth of the economy of the North East and councils' ability to fund essential services. …

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