POORER areas across England are missing out because government funding for public services is often below the amount required to meet basic needs, a damning report published today charges.

The Institute for Fiscal Studies (IFS) said the use of old data by Tory ministers to distribute funding has led to significant gaps between the share some areas receive and the amount they should be given based on current demand.

Analysis of the £245 billion available in 2022-23 shows the highest levels of funding per capita were allocated to inner-London boroughs and relatively deprived areas across the north, including Greater Manchester, Liverpool and Teesside.

But the study, based on government assessments, paints a more inconsistent picture when funding levels were directly compared to allocations which reflect estimated current spending needs.

NHS funding was described as “relatively well-targeted” as two-thirds of areas received allocations within 5 per cent of their estimated needs due to ministers using more up-to-date figures, but the IFS warned the local government funding system has “broken down.”

Only 39 council areas out of 150 received an amount of cash that was within a 5 per cent share, resulting in “inconsistent national funding for social care, housing, transport, leisure centres and libraries,” it said. 

Based on a scenario in which all local authorities set the same level of council tax, the analysis found those in the richer south-east would still have received a share of funding 9 per cent higher than required.

IFS senior research economist Kate Ogden urged Westminster, which is supposedly committed to “levelling up” to get “serious about making funding systems fit for the future.”

A Department for Levelling Up spokesperson claimed England’s most deprived areas would receive 17 per cent more funding per household in 2023-24.