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England鈥檚 biggest cities fear they will bear the brunt of Supporting People cuts after the ODPM outlined a 拢280m reduction to the programme over the next three years.

The long-awaited announcement, made on Tuesday, will mean 拢80m is slashed from next year鈥檚 budget, leaving 拢1.72产苍. The fund will drop to 拢1.7bn in 2006/7 and 2007/8.

Councils will be relieved that the cuts are not more severe, but individual allocations will not be announced until later this autumn.

The government said reductions would differ from council to council and are likely to be based on Audit Commission inspections and the new grant distribution formula currently being developed by consultancy Matrix.

Supporting People funding is essential so vulnerable people can get vital support. It should be made a priority, not cut

Denise Capstick, executive member for health and adult care, Southwark council

The precise weighting given to both has yet to be finalised by the government. A spokeswoman said: 鈥淲e would introduce the formula over time and any changes for individual local authorities would be tempered.鈥�

An ODPM spokeswoman added: 鈥淲e don鈥檛 expect any authorities to have to make more than 7.5% savings next year and the average will be much lower.鈥�

However, urban local authorities have expressed concern they would be hit hard if the existing version of the distribution formula were relied on to make next year鈥檚 grant cuts.

It鈥檚 not as bad as feared. My concern is when allocations will be announced. We don鈥檛 want to go into a new budget year not knowing what is available

Vicky Stark, Look Ahead Housing & Care

In a submission last month to the ODPM, Core Cities 鈥� a group that represents the eight largest cities outside London 鈥� warned that the current formula does not take enough account of deprivation so would penalise urban areas.

The report said: 鈥淲ithout a weighting that reflects the greater needs within core cities 鈥� the distribution [of funds] would not be consistent with need and would provoke widespread instability.鈥�

Housing consultant David Thompson said the distribution formula should not play a large role in deciding the cuts because it had yet to be properly developed.

Will the ODPM ensure local authorities don鈥檛 slash and burn with across-the-board cuts to services?

Nigel Rogers, director of Sitra, an umbrella body for supported housing

However, he added it was too soon to say whether urban or rural councils would be hardest hit.

鈥淲e think using legacy funding figures [funding carried from previous funding regimes into Supporting People] is the only safe way for [cuts to be made by] 1 April 2005.鈥�

The ODPM spokeswoman emphasised that the department would consider a variety of options for the distribution formula.

Local authorities and housing associations welcomed the three-year funding announcement for the greater certainty it would bring to budgets. Nigel Rogers, director of supported housing group Sitra, was pleased by the 鈥渟ense of a predictable financial future this will bring鈥�.

They also applauded the decision not to make a blanket cut across authorities.