Where will the spending axe fall next in the West Midlands?

Jun 11 2010 By Jonathan Walker

Birmingham and other major cities will be hit hardest by the Government’s plans for “momentous” spending cuts, writes Political Editor Jonathan Walker.

Britain’s big cities such as Birmingham and Wolverhampton are to bear the brunt of huge government cuts in council funding.

It has emerged that inner city areas will be most affected by the Government’s planned £1.165 billion cut in funding for local authorities.

Standard funding, which is distributed to every council equally on the basis of population numbers, will not be touched.

Instead, reductions will be made in the extra grants allocated to councils for specific purposes – which usually means projects designed to help deprived areas.

As a result, deprived areas will actually suffer the bulk of the cuts. For example, Birmingham receives £300 million in extra funding, about 18 per cent of its total budget, because it includes areas with high unemployment and poverty.

And Wolverhampton receives £66 million, more than 17 per cent of its total budget.

But for wealthy Stratford-upon-Avon, targeted grants make up less than one per cent of funding.

It means wealthier authorities have little to fear from government cuts while inner city areas will see their funding reduced.

And this is just one of the ways that the coalition Government’s planned massive spending cuts could hit Britain’s big cities.

David Cameron, the Prime Minister, has warned that the Government is planning “momentous” spending cuts which would “affect every single person in our country”.

He revealed Britain was £770 billion in debt – and was set to pay £70 billion every year in interest alone, more than the schools and transport budgets combined, unless spending was cut.

Mr Cameron’s hard-hitting speech, blaming Labour for the state of the public finances, was designed to pave the way for unpopular decisions.

Failing to cut the deficit would lead to “a steady, painful erosion of confidence in our economy,” he said.

The Prime Minister warned: “If that were to happen, there would be no proper growth, there would be no real recovery, there would be no substantial new jobs – Britain’s economy would begin an inevitable slide into decline.”

But a new report by think tank the Centre for Cities demonstrated how vulnerable Birmingham was to reductions in public spending.