22 February 2008
A Whitehall error has meant two London councils will lose special funding they were promised in the provisional local government finance settlement last year.
When the settlement was announced in December, Camden and Westminster were told they qualified for the Working Neighbourhoods Fund, a grant that replaces the Neighbourhood Renewal Fund for tackling unemployment.
The provisional settlement promised Camden £14.4m and Westminster almost £10m in WNF over the next three years.
An authority's eligibility is based on data related to deprivation or employment and benefit claim rates. However, when calculating councils' working age population, officials used a table that excluded people living in guesthouses and small hotels, many of whom are benefit claimants. A correction led to Camden and Westminster falling out of the eligibility bracket.
Colin Barrow, Westminster's Cabinet member for finance, told Public Finance that the loss of WNF funding was 'another case of government throwing a switch in Whitehall and real things on the ground disappearing'.
Camden said the Department for Communities and Local Government's decision to pull the funding created a £1m hole in next year's budget, which the council would attempt to meet out of its own reserves.
A DCLG spokesman said: 'Every effort was made to ensure that the method used to determine eligibility for the new fund was robust. However, our thorough internal investigation showed that some adjustments needed to be made.'
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