David Cameron urged to end Norfolk’s �20m funding shortfall

Prime minister David Cameron is being urged to end a controversial funding deal which has short-changed Norfolk County Council services to the tune of �20m a year as the authority braces itself for swinging cuts.

Communities secretary Eric Pickles is expected to announce shortly a review in the way councils are funded from government.

But County Hall, which has long complained about the current system and its failure to fully pay out what the authority is entitled to, is hoping to pile the pressure on ministers ahead of the review to try and end a system known as 'damping' introduced by the previous Labour government which has restricted grant increases to the authority.

Yesterday the council was told that the authority had missed out on �120m of funding it should have had since the system began in 2006/07.

And the shortfall is set to continue as figures show that the latest two year funding deal, announced by Mr Pickles last year, has seen a cut in grant of �29.4m, or 10pc in 2011/12. Yet if damping was scrapped this shortfall would plummet to �9m.

County council leader Derrick Murphy said he plans to lobby the prime minister at a Downing Street meeting next Monday where Mr Cameron is also expected to face lobbying from Tory county and unitary council leaders on a range of issues.

Mr Murphy, said he had already briefed Norfolk MPs on the situation before Christmas, while Mid Norfolk MP George Freeman, who is also a member of House of Commons communites and local government select committee, has also promised to raise the issue with ministers.

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'It's something of great concern and I will raise it when I am with the prime minister,' Mr Murphy said. 'It was originally brought in as a transitional measure, but it seems to be becoming a rather permanent feature of our grant settlement.'

The council believes the system is in desperate need of an overhaul, particularly as the authority is facing a massive �155m shortfall in funding which could see cuts imposed in the coming months on a host of services.

Previously the authority has argued that ending the system could help peg council tax rises, or see more cash invested in services. But with cuts looming there is a growing feeling it could now help mitigate some of the effects of the most painful reductions.

'We want Norfolk to be treated like everybody else, it's not party political,' Mr Murphy added. 'I have a shopping list of things I want to mention, but what I mainly want to find out is the position vis-a-vis dampening.'

But Paul Brittain, the council's head of finance, warned the council's cabinet that lobbying too hard could prove risky if ministers agree to remove it for Norfolk, only to change the system and leave the county worse off.

'It could be a double edged sword, it may mean we end up as losers,' Mr Brittain said If we end up as losers, we will clearly want dampening to be retained.

The council is also planning to urge Mr Cameron to think again on funding changes for free bus travel which could see the authority short-changed by up to �4.5m.

Graham Plant, cabinet member for travel and transport, said he was hoping for a better response from government over the bus fares funding.

'To be perfectly with you the government does know exactly how much this concessionary fares costs to the council,' Mr Plant said. 'They have all the figures and facts. What's been allocated to us is a very poor allocation.'