Coronavirus: Poorer areas miss out as £100m of emergency cash diverted to richer Tory councils with lower infection rates

Poorer parts of England, many of them Covid-19 hotspots, have lost out on more than £100m of emergency cash, after ministers diverted it to richer – mostly Tory-run – areas, a new analysis suggests.

The government stripped deprivation out of its calculations, despite announcing plans for that switch had been shelved – and despite saying the money was to “fight the pandemic”.

As a result, Labour-run councils which lost big sums include Sunderland (£3m), Knowsley (£2.6m), Sheffield (£2m), Gateshead (£2m), South Tyneside (£2m) and Oldham (£1.1m).

All are among the 10 areas of England with the highest rates of coronavirus infections, according to official figures, and among the most deprived.

Yet, when the cash was announced, local government minister Simon Clarke said it was to recognise that councils are “the unsung heroes of the fight against Covid-19” and faced huge extra costs as a result.

It is intended to fund getting rough sleepers off the streets and domestic abuse victims into safe accommodation, as well as to help manage funerals and bolster frontline services; all tasks more onerous in deprived areas with more virus cases.

The biggest losses in percentage terms were suffered by Knowsley (38.8 per cent), Blackpool (37.4 per cent), South Tyneside (32.8 per cent) and Liverpool (32 per cent), according to the Labour analysis seen by The Independent.

All are among the five poorest council areas, according to the government’s official index of multiple deprivation, except South Tyneside, which is 22nd.

In stark contrast, the 10 richest areas all enjoyed huge boosts in funding, including (Wokingham £2.2m, 83 per cent), Buckinghamshire (£4.3m, 41 per cent), Windsor and Maidenhead (£1.7m, 39 per cent), Surrey (£8.1m, 32 per cent) and Oxfordshire (£4.7m, 32 per cent). All have Conservative-controlled councils.

The Labour analysis follows a study by the Health Foundation finding that the risk of dying from coronavirus is more than twice as great in the most deprived areas of England as in the least.​

Steve Reed, the shadow local government secretary, condemned the way funds had been allocated after ministers “promised to fund ‘whatever it takes’ to get communities through this pandemic”.

“Now the government is cutting emergency funding for areas with the highest rates of Covid-19 infection and diverting it to areas that are suffering less,” he told The Independent.

“This money was earmarked for fighting Covid-19, so it must go to the communities that need it the most. Emergency funding should go to areas with the highest rates of infection.”

Steve Rotheram, mayor of the Liverpool city region, said its authorities believed ministers had “pulled the rug from under them”, after promising they would receive “whatever it takes”.

“Now it’s ‘take whatever you are given’ and it’s noticeable that it’s Labour areas that have missed out in the second tranche,” he protested.

“It is disgraceful if funding is being allocated in that partisan way, after what ministers said about putting away party-political squabbles in a time of national crisis.”

In total, more than £100m was diverted from councils in the bottom half of the deprivation index, when £1.6bn of emergency grants were announced in late April, according to the Labour analysis.

That is the difference from the allocations to each town hall from the first £1.6bn pot, handed out in March, which did include deprivation in the weightings.

The second £1.6bn tranche was awarded on a per-capita basis, raising fears in town halls – which still face an estimated £10bn black hole because of coronavirus costs – that the method will be used for future allocations.

The future downgrading of deprivation was signalled in the so-called fair funding review which began under Theresa May and triggered loud protests.

However, it is supposed to be on hold, until April 2022, after poorer areas that delivered Boris Johnson’s general election triumph were among those facing big cuts.

A spokesperson for the Ministry of Housing, Communities and Local Government said: “We’re providing councils with an unprecedented £3.2bn in the fairest way possible and giving them the resources to tackle the immediate pressures they have told us they’re facing.

“The two tranches of funding were allocated in different ways because they address different needs, but should be considered together as the true picture of this additional support.”