Local authorities across the country are teaming up to challenge the Government's population estimates in a row that could land the Government in court.
Slough Borough Council is leading the protest from the South and Redcar & Cleveland Borough Council is leading the protest from the North. Redcar's director of finance and procurement Ray Richardson told The Lawyer that the authority had not ruled out pursuing a judicial review as its grant allocation is based on flawed population statistics.
Slough's chief financial officer Andrew Blake-Herbert stated: "We now think that the Government's position is untenable."
Based on the 2001 census and mid-year estimates conducted by the Office for National Statistic (ONS), the Government says the population of Slough is falling, resulting in a reduction in grants. Now the ONS has admitted that its data could be flawed.
Council bosses say the figures fail to take into account foreign migrant workers, and are demanding more funding for a population they say is both bigger than the official count and growing.
Blake-Herbert said: "We estimate that between now and 2011 we're going to be down about £3m a year. That figure represents about 6 per cent of council tax revenues, yet the Government has capped council tax increases at 5 per cent, meaning we couldn't even replace all the money ourselves if we tried to."
Slough's director of law and corporate governance Steven Quayle has instructed James Goudie QC of 11 King's Bench Walk, who advised the him to take the case forward.
Other authorities have contacted Slough about joining its protest, including Darlington, Hartlepool, Middlesbrough, Newcastle City, Peterborough, and the London boroughs of Brent and Hounslow.
The Government spends a total of £49bn in grants to local authorities annually. Phil Woolas MP, the Minister of State for Local Government, was unavailable for comment.