City’s spending power is hardest hit

View of Liverpool Town Hall of a day from Castle Street

Liverpool’s “spending power” has been hit worse than any of England’s major cities in the latest round of Government funding cuts, a meeting of the Core Cities Cabinet was told.

They heard the Government’s own calculation of the money the cities will have to spend will reduce by between 5% and 10.8% over the next two years.  At the same time some areas in the South East of England will actually see spending increase.

The summit of Council Leaders and the Mayor of Liverpool considered a report looking at latest Government financial settlement.  It showed that “spending power” in Liverpool will reduce by 10.8% over the next two years, followed closely by Birmingham at 10.7%. At the same time Wokingham  will see an increase of 2.9% and Hampshire 1.3%.

Mayor of Liverpool, Joe Anderson, said: “According to our own calculations our ‘spending power’ has been cut by more than 16%; even by the Government’s own admission Liverpool is still one of the hardest hit hard in the latest round of cuts. This is happening while leafy suburbs in the South East of England are actually seeing their spending increase. Core cities budget

“I am only too well aware of the current economic challenges the country is facing but we desperately need a fairer distribution of how money is allocated across the UK.

“Not only are areas with high levels of deprivation facing some of the largest funding cuts, but the Government is also failing to recognise the impact Liverpool and the other Core Cities can have in driving an economic recovery. ”

The Core Cities, including Liverpool, are facing higher cuts per household in terms of overall spending power than areas with lower deprivation. At the same time, the urban areas around Liverpool and the other major English cities deliver 27% of the English economy.

Mayor Anderson added: “We’ve recently attracted more than 1,000 new jobs into the city and there is currently £1bn of investment work under way.  We have the potential to do even more of this in Liverpool and I know our best days are ahead of us.  But if the Government really wants to drive a sustainable recovery, they should be supporting us in doing this rather than taking our funding away.”

The “spending power” calculation looks at the total amount of money a city has to spend and includes funding for things like the public health responsibilities councils have recently taken on and grants for very specific projects.

Mayor Anderson added: “Using the spending power calculation is in many ways smoke and mirrors because it looks at lots of sources of funding that we have no real control over, rather than looking at the money we have to deliver services to the people of Liverpool. The fact is the money we receive from Government for services has been cut by 56%. What we can agree on though is that, according to the Government’s own figures, Liverpool City Council’s reduction is twice the England average, despite all the challenges the city faces. That isn’t fair and doesn’t add up.”

The eight Core Cities are Liverpool, Birmingham, Manchester, Bristol, Leeds, Sheffield, Newcastle and Nottingham. These represent the largest English cities outside of London.